Wendy, it sounds like you've done a great job with your daughter and her debit card. I didn't realize you could set the cash advance limits. What a great idea. Is that per day or per month?

I liked your suggestion to her about keeping a running total of her transactions. Gee.. just like keeping a check book. You've given her some sound financial advice. I hope she learns from it.

You've done a great job.

Vicki,
Re: the advance limits - It depends on the card and what bank or financial institute is putting it out. We have hers set with daily limits with the USAA prepaid spending card.

We can also "freeze" the card at any time, or simply remove ATM usability. Say kiddo withdrawals the $20/max on the first day of the month, remove ATM access for the rest of the month so that all the money isn't pulled off of it as cash.

AND - "Giftgivers" (i.e. Grandparents) can be added to the account so that they can log on from their computers and transfer money from their debit cards or with an e-check to the prepaid card.

Also, at some point our kiddos have to begin building credit, which a prepaid card - MC logo or not - will not do help them do. However, I do think that "building credit" is not something most freshmen-juniors in college, not working a full-time job, getting a "free" Discover card on campus with a $500 - $1500 credit limit can handle.

Credit card companies target new to the market 18 - 20 year olds because the majority of people keep their "first" credit card for the rest of their life.

Not only do they target kids, but then they charge them 21% interest and kids run up charges to the limit so that they're all but assured to never pay it all back. I've heard that's how most kids get into credit trouble.

You are right, Vicki - that is what happens, I think the statistics are that at the time they leave college most early 20 year olds have at least 2 credit cards with over $1000 debt on one or more and no job.

Remember when our older kids were young and it was "just write a check for it?" (without regard if there was money in the bank to cover the check)

Well, the mentality is still there - it is just now - "just use your card, Mommy" (quote from my 6 year old when she wanted a toy at Walmart) My response, "Just use your cash you have saved, Kayleigh." "Well, I forgot it." "Well, guess you'll remember to bring it next time." "Well, I don't want to use MY money, but You can get it for me with your money." ha! =)

(Had to give her an "A" for effort on that one.)

Yeah.. been there.. heard that. Plus the "I'll pay you back later" spiel.

Kids need to learn that money is something of value and it needs to be earned before it can be spent. I hope I've given my kids a good lesson to learn from, and it sounds like you're well on the way to teaching yours.

My son (youngest) makes me very proud when I hear how frugal he is and the way he talks about his plans for the future. He's got a good head on his shoulders.. but then, I could be a bit biased.

I'll never forget the time my grandson Jason was a mere wide eyed six year old and I took him to M&M World up on the strip to see all the newest M&M creations. He spotted one he liked a telephone that cost $79.95. Number one he didn't need a phone, two - much too expensive. So I said to him, gosh honey Grandma didn't bring enough money with her and we still have to go for lunch. He put his little hand to his forehead and slapped it and bellowed quite loudly, "so just use plastic?" I nearly died and people around us began to laugh. I bought him a lesser item and used cash and we left. Imagine a six year old knowing about credit cards!

Prepaid debit cards are a very smart idea when it comes to doling out cash such as allowances or gifts. Think of it this way...debit cards act like a credit card, and leave a paper trail. What illegal acts are going to be accomplished where a recorded transaction is left? Who wants that?

The idea behind the prepaid debit card is simple; you store money on the card, and access the cash safely, securely and conveniently. The theory is simple, and the end result is what's desired. Your money is protected, you and your identity is secure and you still have the ability to not have to carry or give cash.

If anyone out there handles a business online or offline, keep a debit card in mind. Since you can control the balance, and the balance can't be exceeded, these prepaid cards are convenient to pay for services without risk of overcharging or overindulging.

Hope that helps.

You can find a good list of prepaid debit cards from www.creditcardchoices.com.

-credit101

Thanks. Another thought is gift certificates. My daughter never wants anything specific as gifts so we have begun giving her mall gift certificates. You can buy gift certificates to the whole mall. That's what we do. Then she can shop in any of the stores she chooses. This also works like a debit card.

credit101,

Thanks for the input!

welcome to boomer women speak! We'ld love to know more about you!

danita

I have discovered debit cards recently for my youngest, 16 years old.

For my older ones, I have used credit cards for college, and it has worked well.

But for my youngest, I like that he knows the money comes out of his bank account, and he doesn't have to carry cash.

He rarely uses it, but if he needs it, it is there.