I’m going to make this short and sweet…or at least that’s my intention.
I just stumbled on a prepaid card called the UPside Visa Card but I don’t see any upside to this.
Why would you pay a monthly fee to use a prepaid, preloaded ‘debit’ card if you could just put that same money into your checking account and spend it using a REAL debit card? This is just flat out stupid (yes, ask me how I really feel).
This card, called the UPside Card is dubbed as ‘the prepaid Visa card for teens and their parents’ and well, I must be missing something because I don’t understand the point. They say on their website:
UPside Visa is a reloadable prepaid Visa card designed for the 13-25 age group and their parents. The card remains under the supervision of parents.
OK, so if the teen has it, HOW exactly is it still under the supervision of the parents?
This is text right from their site:
- For high school students, it’s a great alternative to cash allowances that are unsafe, offer no spending control and often require trips to the ATM. It’s also a great educational tool to learn about financial literacy.
- For college students, it’s a convenient way to manage their money, track spending in real-time and stay away from credit cards. College students can receive occasional funds from their parents, receive a pay check directly onto the card and even write checks online (For cardholders 18 or over)
Let me get this straight…if you have this card, kids can control their spending but if they have cash they can’t? This is completely bassackwards as my mother would say. When kids SEE the cash start to run out, they stop spending but if they can’t SEE what’s on the card, they have to stop when the card doesn’t work anymore!
As far as a convenient way to manage their money, track spending, etc., my experience is that my checking account using Quicken or my old fashioned check book register certainly does the same thing!
FEES…there are ALWAYS fees!
If you’ll look here, if you want to be able to access your money via an ATM, you pay $2.99 or you could just pay a $29.95/year fee (evidently that’s a better value than saving the $29.95 in your saving account and not using this card).
But look…they don’t charge the parents a fee for putting money INTO their kid’s card from their checking account but don’t try to load it from a credit card…more fees. How generous…NOT.
And finally, don’t be fooled by the Rewards program. Note that you redeem some of the points in the UPside Mall (oh goodie…a trip to the mall) but they do offer some cash rewards.
Bottom line: USE THE BANK. Teach your kids to use THEIR money using a REAL bank account and then when they’re ready to handle the responsibilities of a real credit card, have them apply and manage a credit card wisely. And tell them to get a card with points so at least if they are going to use a credit card, they can use the reward points to book a flight home to visit you once in awhile for free!
Clearly, the purpose here is to get kids used to reach for plastic cards (and pay fees) when they buy things before they ever get a chance to experience the simplicity and discipline of cash. It also encourages the idea that the money isn’t theirs, it belongs to their parents. And the age group, 13-25? 25? Really?
In 15 years, I would like to see a study of the financial state of people who had a parent-funded credit card when they were in their twenties.
The different ways we are teaching dependence at an early age is downright scary.
Dave…thank you sooo much for your comment. Creating dependent adults is one of the things I talk about all of the time. We grow our kids into adults who think they have to depend on a job, an employer, the state, a paycheck, and on and on. Makes me sort of sick to be honest. We have to grow adults who can not only take care of themselves but see life differently. Again, appreciate your feedback.
It would be good for kids to learn about how/why this is a bad idea.
Thanks for sharing!
Thanks Jim. I did this little activity spur of the moment in our Camp Millionaire in March where Darren, my co-teacher, and I were having our famous fireside credit card chat with the kids. It’s the only topic we intentionally do not make fun. We start by telling kids that what we’re about to talk about can ruin their lives if they aren’t careful and don’t listen. They listen…
Anyway, when we were taking about the difference between spending your money vs. spending the bank’s money and although they ‘said’ they go it, I proved to them the allure of it all. I pulled out 10 $100 from my wallet and waved it at them. They all woo-woo’ed over it. I said who wants to spend it? They all raised their hands. I said, “Fine but you’re going to have to pay me back next month and you’re going to have to pay me back $1100, not just the $1000. How many want to spend MY money now?”
You should have seen the ah-ha’s on their faces. I pointed out how we had just talked about how easy it was to spend someone else’s money and they all agreed it wasn’t a safe way to buy anything but yet when I offered, they had completely changed their minds and forgot what we had just discussed. They were surprised at the allure…at that’s what it is.
I read recently that college age kids (they are still kids in my book) think it’s sexy to have debt…like you said, we’re in for a whole of hurt…
Great article! I agree that the whole idea is stupid (and I don’t use that word lightly), but I’m so old fashioned that none of my children get cell phones, either. Oddly enough, they’ve never been hampered by it. Great lessons you teach! I’m going to have to do a credit card lesson like you mention, and I appreciate your saying that you don’t make it fun. Some things need to be treated seriously, and this is one of them.
Hi Melody…yes, it needs to be more than serious. There even needs to be a note of foreboding in it as far as I’m concerned.
I believe, though our new technology-filled world can lend a bit of fun and convenience to our lives, is going to prove to be the beginning of some ends we’d rather not see ending. Thanks for your comment and great work being a Mom. You get points in my book…not sure they’re redeemable anywhere though:-)
OMG !! – just WHAT is our world coming to?. Lucky for me I am taking 2 ‘Money Game’ classes THIS week at 2 different schools (thanks to NZ Home Loans, check them out!!) so will add your $1,000 offer to the kids and see what their response will be.
Seriously, would LOVE to do some research into kids who get ‘real’ money each week from their parents to learn from, and be able to track them into adulthood. Oh well, the only way to eat an elephant is one mouthful at a time -or in my case one class at a time!!
Anita…I know! And I’m so thrilled you are taking the Money Game around New Zealand. We need to find a similar home loan company in the states. Do they have any affiliation with a US company? Find out for me would you? Just imagine if we had 1000 Anita’s all over the US and all over New Zealand and…you go teach ’em!
Elisabeth, I will find out how far NZ Home Loans spreads. They are really more like your personal Money Doctor, making sure you don’t end up with cancer of the wallet!
I have just got back from Teaching my 2nd Money Game session this week. It is just SO MUCH FUN!! (The Teacher joined in and played too, and she says she wishes she had learned that stuff when she was younger). What I LOVE about it is that every time it is completely different. Diff ‘event cards/diff kids/diss discussions… If only I could ‘clone’ myself … (working on it)
Anita…you make my day on a regular basis. I adore you!!!!!!!!!!!!!!!
Apparently you think that everyone is able to get a checking account. Over 15% of the U.S. population — 35 million people — are considered Underbanked meaning they can’t get a checking account or afford all the fees that come along with a checking account (which are higher then most prepaid cards). Prepaid cards offer an alternative to those people. So next time before you want to rattle off your opinion about something, make sure you know the products intended audience. Helps you be more credible.
People who don’t have checking accounts often CHOOSE to not have bank accounts at all and one of the main reasons is that they 1) don’t trust the banks and 2) aren’t legal United States citizens.
What these people DO use is cash…and last I read, there are no fees at all for using cash.
And thanks for worrying about my credibility but I really don’t need it.
These cards do have a purpose. Many people have had problems in their fiances and now, may have judgements against them. As a result, they may no longer be able to open a checking / savings account, either because of bank policy or fear any funds will may be garnished. They have a job, they get paid, but can’t cash the check because they dont have a local account. Employers may not have local accounts, so the employees can’t even use the bank for the account the check is from. These accounts do offer the ability to use driect deposit. Having the money on a prepaid card means can pay for things like utillities that take cards (strangely, Cox Communications will not take cash at their branch offices for Cable/Interent), and cash out of their hands as cash tends not to be tracked like accounts. At least they can look online and have a record of wehre teh moeny went. Yes, it is about education, where is the moeny and how and wehre is it being spent. Cash, check account, credit cards or debit cards. They all have advantages and disadvantages.
Ed, while I’m sure these cards may have a purpose here and there, my issue with them is they are so often aimed at our youth who haven’t figured out how to use ‘real’ money yet.