It’s been all too easy for any consumer to rack up credit card debt, but the temptation may be all the more fierce for teens eager to keep up with shopping trends among their friends.
Teenagers today are likely learning about credit cards from their parents, but after the recession brought on reduced usage and new credit card reforms, teaching kids about credit may be especially important.
Even though new credit card legislation limits what credit card companies can do to try and lure in their youngest customers, kids learn by watching the spending habits of their parents and other adults around them.
At the same time, one could argue that getting rid of the novelty and allure of using plastic may reduce the temptation to overspend, especially when there’s a set spending limit, and there are some easy-to-use tools that can do just that.
Visa Buxx, for example, are prepaid and reloadable cards that were first made available to teens in 2001. You can swipe it like a credit card, and kids as young as 13 can use them.Certain individual consumer banks offer Visa Buxx (Stock Quote: V) cards, so the fees you’ll be charged may vary, but could include an enrollment fee, ATM fee, bank teller fee, declined withdrawal fee, balance inqury fee and an inactivity fee, according to the Visa Buxx Web site.
American Express (Stock Quote: AXP) has also recently launched its own prepaid card for kids called the PASS, after credit card reforms have made it more difficult for creditors to collect from new customers. Young adults under 21 now have to get a parent or guardian to co-sign for a new credit card account as a result of the new Credit Card Accountability, Responsibility and Disclosure (CARD) Act that was implemented earlier this year.