Comments on: Give teens bank accounts, not prepaid cards A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Amandy998 Tue, 06 Sep 2011 21:23:35 +0000 I agree with the article completely — I looked into a bunch of different teen bank accounts, including pre-paid cards, and decided to open a MONEY account with ING Direct instead. No fees or minimums. Also think it’s great that they’re making financial aspects cool for teens with a Facebook page and sweepstakes.

Definitely worth checking out, great option for teen banking!

By: KDC1 Sun, 12 Dec 2010 22:09:46 +0000 I recently checked out bank accounts for my teen son. We didn’t want him to attach him to our account or our credit card from reasons i am sure i don’t need to explain. Most banks cant earn fees like they used to because of some new law so the checking accounts we looked at for him were really expensive and most wanted to attach them to our account, including a debit card. Bank of America wanted $14.95 per month for a student checking account if it had less than $1500 in it. My god..who puts that amount into a 15 year olds account.

Anyway we looked at prepaid cards like the ones from VISA and MasterCard and AMEX. We found the MYPLASH one to be the one with the best and lowest fees and our son liked it.

We feel good about the prepaid thing because he can use the card online and its not attached to our bank account or our credit card, plus it was easy to get it reloaded. My Husband is a CFO and he ran the numbers against a checking accounts and other prepaid cards and still prepaid was cheaper in the long run. Thats my 2 cents. We got a prepaid for our teen and it works just like we wanted it to. The only thing you have to look out for is the fees. we compared a lot of cards and the Myplash card had the lowest by far and even tells the teens how to avoid 99% of them.

We are a fan of prepaid

By: Engels Sat, 20 Nov 2010 15:03:04 +0000 Hello, Felix, this comment is in related indirectly to this post. I was trying to send you an e-mail but couldn’t find your e-mail address anywhere on the page.

I’ve been reading your page for more than a year and remember clearly your posts about the future of the checking account once the banking regulations kicked in.
Today I find out that my bank hit me with two fees that up to this point were unknown to me: once is:

DEBIT OF ATM WITH FLAT FEE $10.00, I don’t understand this one, ten dollars for what?

DEBIT OF BASIC CK MAINT FEE $5, A maintenance fee I thought this one was charged at the beginning of the year, but who knows how many times they’ll do it.

So with all these little games banks are playing with checking accounts, do you think it’d be a great idea to open accounts for our kids, under this insane conditions where you are bombarded with fees whenever they please.

I believe that another regulation on the workarounds of the previous regulation is necessary.

By: TFF Sun, 14 Nov 2010 16:49:37 +0000 There’s nothing inherently evil about credit and debit cards, and they can actually IMPROVE household accounting and budgeting practices if handled properly. My wallet doesn’t offer me a monthly itemized accounting of my cash purchases, however all credit card purchases get tracked in Quicken.

The danger comes when they are used in the absence of sound budgeting practices. I don’t know why so many people succumb to that kind of laziness, but it seems to be quite common for people to spend to their limit without any sense of what they can afford to pay at the end of the month.

By: BakerWright Sun, 14 Nov 2010 15:34:39 +0000 Prepaid debit cards offer the same convenience and flexibility, if not more, than a checking account. Just like a debit card, prepaid cards are accepted ANYWHERE the card’s brand (Visa, MC, Discover or AmEx)are accepted. Teens can use them to pay bills and buy things online and virtually all the cards offer free access to card balances and transactions online or through text alerts.

Funds can be loaded onto the cards online or at 200,000 retail locations nationwide. There are many low cost cards available and most will waive fees if funds are directly deposited to the cards each month. Funds will also be replaced if the cards are lost or stolen.

Contrary to your assertion, prepaid cards like NetSpend offers a savings account, paying 5% interest. Finally, free checking is going to become a thing of the past as banks have announced due to new laws prohibiting overdraft fees they will start charging monthly fees of $8 or more. If “there is no reason why a kid should have a checkbook . . .because he will bounce checks,” it seems prepaid cards which can be used anywhere are the way to go.

I wouldn’t recommend a high fee, celebrity status card like the Kardashian Kard or Rush Card there are other great options like American Express Pass, Walmart Money Card and more.

Crystal Wright, Network Branded Prepaid Card Assoc.

By: johnband Sat, 13 Nov 2010 09:36:13 +0000 Sorry, that was unclear – these are *bank account* debit cards, not prepaid ones.

By: johnband Sat, 13 Nov 2010 09:35:23 +0000 Axoplasm: not sure about the US, but in the UK and Australia there are debit cards that can only be used for electronic point-of-sale transactions, that verify balance in real time and can’t go overdrawn ( “all authorised” debit cards) – these are the ones that are offered to under-18s and adults with very poor credit histories.

By: PatricePeyret Sat, 13 Nov 2010 08:11:40 +0000 Some (not all) teen-optimized prepaid cards have something most checking accounts don’t have: two separate account accesses for the teen and the parent, with different privileges.
The parent can see the transactions, replace a lost card, add money or suspend access if school grades are not good enough.
The teen can see the transactions, and add his/her own money.
[Disclosure: my own company manages such cards under the UPside Visa brand]

By contrast, the overwhelming majority of banks provide a single online access to a checking account, with no ability to share through some hierarchy.
So either a parent keeps the access to himself/herself without delegating any access to the teen. Or the parent relinquishes access to the teen entirely.
Not the best way to implement a gradual transition of responsibility.

Evidently, teen cards pushed by shopaholic celebs are a terrible idea.
Responsible spending at no or little fees, with the right prepaid card, can do more than a checking account, with no overdraft risk and no minimum balance.

By: axoplasm Fri, 12 Nov 2010 21:56:01 +0000 This is a good idea all around but a point of clarification:

It is actually possible to overdraw an account with a debit card. Depending on the merchant, charges may not be posted immediately, especially on weekends. So one can use the card several times in a day, overdraw the account, and not feel the consequences until the charges post later. I don’t know of any easy way around this, unless you use non-debit ATM cards (i.e. the kind without credit card logos.)

Of course, overdrawing one’s account and paying the fees (which are often lower for debit overdrafts than for actual checks) could be an important piece of financial education. Namely: spending money you don’t have costs more than spending money you do.

By: y2kurtus Fri, 12 Nov 2010 21:28:46 +0000 Outstanding post…

We would be a stronger nation if there was a strong personal finance requirement to earn a high-school deploma or GED.

Anyone buying financial services from the Kardashian girls is getting LESS than they paid for!

You frequently suggest credit unions as a good starting point for some fairly priced alterntives.

As a community banker myself I would advocate a mutual community bank… very much like credit unions in all respects but we pay federal income taxes too!