There are many good reasons to get a pre paid credit card, but there are two primary reasons.  One is for younger credit card holders who are not old enough to get a regular credit card, and the other reason is to help the credit card holder control spending, but we’ll talk about this next time…

Let’s look at the first one.  Many teens have money these days, even before they need it in many cases.  However, this can also be seen as a good thing.  In an increasingly more and more financially focused world there seems to me to be a need for a financial education system that actually works.  Now, i’m not talking about some class in school that tells you about how when you get big you need to pay a mortgage or rent and that the taxman will want all your hard earned money, i mean a mandatory course that teenagers must attend on graduation from high school.  This would enable them to grasp the finer points about money and the world in which it operates.  Credit could be covered in much more detail in this case, and the future of our financial institutions would be much more secure.

So what has this got to do with the pre paid credit card.  Well you can begin this education by loading one of these credit cards with your kid’s pocket money to see just how they handle spending it on the card.  Once they understand that the money will only last so long on the card then they will begin to understand that they can only spend what they have, regardless of the plastic card in their hand.  This might just be an excellent survival tip for them.