Introduction to a Prepaid Card for Kids and Teens
This video explains the concept of a Prepaid Card in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about a prepaid debit card, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is a prepaid card
- How can you load money onto the prepaid debit card
- Where can a prepaid card be used
- What are the advantages of prepaid debit cards
- Are there any disadvantages of prepaid cards
- Should you use a prepaid debit card
What is a prepaid card?
A prepaid card is a type of cashless payment option where you can only spend money that is loaded on that card. This aspect makes them similar to gift cards – but unlike gift cards, they are not limited to just one store.
You can get a prepaid card at convenience stores, pharmacies, many retailers or directly from the card issuer.
Prepaid cards are often called prepaid debit cards, since they work like a debit card where you spend your own money and don’t borrow like with credit cards.
But they are slightly different from regular debit cards, as they are not linked to a bank account.
How can I load money onto the prepaid debit card? What happens when I use up the money?
There are many ways to load money onto a prepaid card – it can be done by using cash at certain retail locations, or by transferring money using credit or debit cards, mobile apps, or a bank account.
Once you use up the money that is loaded on the card, you can simply reload your prepaid card using any of these methods.
Where can a prepaid card be used?
It can be used for all online or physical transactions where credit or debit cards are accepted, like making purchases, transferring or receiving payments, withdrawing cash from ATMs, etc.
What are the advantages of prepaid debit cards?
The main advantage of a prepaid card is that it is not linked to your bank account – making it impossible to overspend and completely drain your bank account, since you can only spend money that’s on the card.
This also makes them an attractive option for travel, where there is a possibility of the card getting lost or stolen.
Another advantage is that anyone can get a prepaid debit card – even if they don’t have a bank account!
Are there any disadvantages of prepaid cards?
One big disadvantage of prepaid debit cards is their fees. You may be charged a multitude of fees including monthly fees, transaction fees, fees for loading money, fees for checking your balance, etc.
Also, you would not be able to use it in an emergency if you didn’t already load money onto it.
In addition, prepaid cards don’t help with building a credit history as the transactions are not reported to credit bureaus.
Should I use a prepaid debit card?
If you don’t have access to a regular debit card, overspend frequently, or want to avoid credit card debt, then a prepaid debit card might be a good option.
However, if you think you will be responsible with a regular debit card or credit card, then it’s best to avoid prepaid cards.
Do you use a prepaid card? What has been your experience? What kind of fees are you paying?
Let us know through the comments!
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: Prepaid Card
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about prepaid debit cards: What is a Prepaid Card, How can you load money onto the prepaid debit card, What happens when you use up all the money, Where can a prepaid card be used, What are the advantages of prepaid debit cards, Are there any disadvantages of prepaid cards, …