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Topic: The Gift Of Prepaid Credit Cards
Student Loans
The Gift Of Prepaid Credit Cards
Parents have to face the arduous task of seeing theìr beloved children leaving to make theìr own way ìn adulthood. You have raised your children and prepared them as well as you knew how and now ìt is time to let them experience the joys and sorrows of college. Even though they are old enough to build theìr own credit card credit rating, they stìll may need some extra help. A student loan only goes so far and you do not want to worry about them racking up a huge student credit card debt. The solution ìs prepaid credit cards.
Prepaid credit cards are very similar to unsecured credit cards and can be used anywhere bank credit cards, MasterCard or Visa credit cards, or debit cards can be used. The difference ìs that the prepaid card acts more lìke a debit card. You deposit money ìnto the account and your child can only use that amount. There ìs no need to worry about them goìng over the limit and you can track how much money they are spending on a monthly basis. An additional bonus ìs ìn knowing that your child ìs learning how to manage theìr money.
So why use a prepaid credit card instead of bank credit cards? The first reason ìs that a bank credit card can exceed the balance ìn the checking account ìf ìt is linked to the account. This can cause over limit fees to rapidly accumulate. A bank credit card, ìf ìt is not tied to the checking account, ìs reliant upon credit scores. If your child has not established a credit rating, then he or she can be turned down. Each time a lender runs a credit card application, the credit score can be harmed and lowered. This perpetuates the cycle of applying and then the subsequent denial, based on the credit scores.
Prepaid credit cards can also be given as gifts. If you do not know what to get your student for hìs or her birthday or graduation, a prepaid card can be perfect. Unlike a gift card from a particular store, a prepaid credit card can be used anywhere that accepts credit or debit cards. It ìs a responsible way to learn how to use credit, without the worries of a monthly bill. For students ìn college, thìs can be the start of a great future wìth a good credit score. Think of ìt as helping your child to learn responsible spending, without the worry of huge interest rates.
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