The Kardashian Sisters Launch Their Own Prepaid Credit Card

Beauty, fashion, reality TV, frangrance and now a financial product?

Mobile Resource Card, a provider of custom prepaid card programs, has partnered with the Kardashian sisters – Kourtney, Khloe, and Kim – to add a prepaid credit card to their empire of products.

The Kardashian sisters say, “We are excited to partner with mobile Resource Card to create our very own financial products. Now our fans will be able to take us with them everywhere.”

According to the NYPost, the new Kardashian PrePaid Credit Card is being marketed as helping parent keep their kids safe by allowing them to monitor their teens’ spending through their cellphones.

PrePaid Credit Cards for Teens?

While I do not condone the possibility it may be released to teens as young as 13 years old and that credit cards should be a sign of glamour with bling and celebrities, I do think cards – whether debit or credit cards – will far out weigh ‘cash is king’ in the near future. It might be worthwhile to teach teens how to responsibly use a prepaid credit card.

How do you teach a teen the concept related to using a prepaid credit card? Let us consider a few things.

Prepaid Charges

As parents, you need to teach your children about fees, charges, penalties, and any other associated costs that come with the card. What are some of the fees and additional charges?

Most prepaid cards impose transaction fees every time a cardholder withdrawals money from an automated teller not associated with the card issuer. The cardholder may also be required to pay declined transaction fees if they fail to replenish funds on their prepaid credit card.

Sit down with your child to read the terms and conditions associated with the card. Help them understand the fees and costs that come with being a responsible card holder.

Prepaid Card Rates

Now that you discussed the fees and costs associated with having a prepaid credit card, the next things to help them understand is the interest rates. Although, a prepaid credit card does not impose interest rates because there is not a hold balance with the card company, it does impose interest for overdrawn transactions.

Parents need to encourage their children to spend less than the available balance on their prepaid cards. This way, they can avoid learning about interest the hard way.

Teach them to Budget

As with any card holder, there also comes the responsibility of maintaining a personal budget. This is the most important lesson you can teach any child to help them manage their finances more effectively.

As parents, help them draft a simple budget that will track:

  • Money earned through household chores, allowances, and odd jobs
  • Balance available on the prepaid card
  • Money spent during the month

Teach your children to track it frequently to stay on budget, spend no more than fifty percent of their available card balance, and to pay it in full each month. This will help them build a great credit score in the future.

If the lesson of building a budget is embedded in their minds at a young age, for sure they will become financially responsible individuals in the future who can handle their finances and plastic cards responsibly.

Review the statement

Some of the prepaid credit cards will send you a monthly statement. And almost all the card issuers offer online account management tools, where you can help your teen track their spending and transaction time in accordance with their budget.

Sit down with your teen once a month to review if they are staying within the budget and spending plan; review any fees or costs. Continue to guide them in using a credit card responsibly.

The the Kardashian PrePaid Credit Card will be available the day after the official launch, on November 10, 2010.

{photo credit: starpulse}

19 thoughts on “The Kardashian Sisters Launch Their Own Prepaid Credit Card

  1. Nicole

    These ladies are definitely not what comes to mind when people think about being financially responsible. Still I don’t quite get the uproar about the fact that they’re launching this product. Russell Simmons has the Rush Card, Amare Stoudamire promotes a prepaid debit card, Montel Williams promotes Money Mutual, a payday loan company. What’s the big difference?

    Reply
    1. Christine Post author

      Hi Nicole, Of course the uproar is over the fact its geared towards teens. Teens and financial responsibility is rather hard to come by. Of course, if the parents are financially responsible it would help in two ways: 1)they would know if CC for their teen is a crazy thought in the first place or 2)the kids would learn about managing CCs the proper way.

      Reply
  2. The Lost Goat

    Basically, now that fees on credit cards have been reduced by the Credit Card Act of 2009, the companies are doing everything they can to get you to sign up for pre-paid cards, which are not covered by the law. Enlisting celebrities is a time-honored way to separate teens and tweens from their parents’ money.
    As far as I know nothing stops you from putting your minor on your credit card account and giving him or her a card. I’d do it with Amex, since they very nicely break the statements out by card user, so his or her use would be easier to monitor. The downside is that they have access to whatever your entire limit on the card happens to be, so you have to keep the limit on that card to something that can be covered if your teen decides to go hog wild. The upside (besides the lack of crazy-ass fees associated with pre-paid cards) is that once you are assured that they understand the use of credit, you can give them access to enough of it to cover any emergency, without having to tie it up before the emergency occurs..

    Reply
    1. Christine Post author

      Good point – they definitely are not covered by the same fraudulent protection laws. Fraudulent protection is usually a voluntary choice and carries the card issuers specific terms. Second, prepaid credit cards are not covered under FDIC. I don’t see the latter as important, for a teen card. At least in my opinion, because I would think the balance is not very high. At least for my kids, they would not be. ;)

      I don’t plan on signing up for any new CCs, but I will need to check out an AMEX statement. That is great they break it up by user. Nice idea, AMEX.

      Thank you for pointing out these important things to consider.

      Reply
  3. Jaime

    This is crazy scary! I hope families can talk about money and all the un-sexy that goes with it, but right now how many families really do talk about it.

    Reply
    1. Christine Post author

      Definitely discuss the un-sexy that goes with it. And how many parents are financially secure with their credit cards to be teaching their kids to use them responsibly? It is scary.

      when I was younger, I remember seeing a video of lungs destroyed by smoking. Maybe they show a video about families burdened with credit card debt. ;)

      Reply
      1. Jaime

        Just started watching “Downsized” and I’m interested to see if it helps other families “get it”. I appreciate the family putting it all out there in hopes of saving others from making the same mistakes.

        Reply
  4. Credit Cards Canada

    Canada’s biggest fast food chain is named after hockey legend (and chain founder) Tim Horton. Shania Twain and Jessica Simpson put their names on perfume. Why not a Kardashian Credit Card?

    Reply
  5. Nick

    Hmmm… my brain is fighting itself here. One part of it is not a big fan of younger folks being handed plastic. Another part of it sees sine value “IF” parents can teach kids how to budget and use plastic responsibly, which may avoid a lot of trouble w/ credit cards when they’re on their own (although you don’t “need” a Kardashian prepaid card to do that…).

    So I’m torn. In the end, the capitalist in me says “go for it.” There are few things that I object to almost without exception (like payday loans for example). Hopefully the parents who get these use them to train, rather than spoil.

    Reply
      1. Christine Post author

        Nick, my husband says the same thing about the Kardashians.

        But they have a similar background to Paris Hilton –
        Hilton Hotels = Big Daddy Lawyer
        Beauty
        Money
        Gossip & Drama

        ;)

        Reply
    1. Christine Post author

      I feel the same way as you do… if it can be used as a tool. Unfortunately, Americans are very plastic focused. And since we are…I would like my children to be prepared. But I am happy enough working this lesson with my son’s debit card tied to his teen checking acct.

      Reply
      1. Nick

        Absolutely – “Responsible credit card use” is certainly pretty rare.

        By the way, I haven’t done it yet, but I’m adding my 17-month-old to my credit card. He won’t know it though (even if he could understand). I have a Bank of America account and they do free museums with your card once a month. But everywhere we go wants to charge for the baby because he doesn’t have a card in his name. Hello authorized user! Can you believe they’ll let me do that? I e-mailed customer service and they didn’t even flinch.

        Reply
  6. FB @ FabulouslyBroke.com

    I am still stuck on the Kardashian sisters with their own credit card.

    It gave me a big “WTF” moment.

    I guess it’d be a status symbol? I wonder how much people are going to pay for that privilege.

    I guess to each their own. If there’s a market, why not?

    Reply

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