Tag Archives: prepaid credit card

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}