For the past four years my husband and I have been using a prepaid spending card to load money onto for our oldest daughter.

I would recommend anyone considering doing this to shop around and make sure that the card is really free - no charges for inactivity, no charges for use. We use USAA (www.usaa.com) for ours.

Some of the negatives to these prepaid cards is that there IS a way to "overdraw" the account.

We experienced this with our daughter when she would use her card at the gas pump to "pay at the pump", the bank would reserve $1 instead automatically deducting the $20+ gas bill.

This created a problem with our daugther's account being overdrawn because she would "check" the balance by phone and think she had more money to spend than what she really had. This continued until will insisted one key thing:

1. That she is accountable for what happens on the card.

If she overdraws the card for ANY reason then her card gets frozen for a month and although we continue to put the allowance on the card, no interest* incurs on her card, and she cannot spend any of her money until one month from the time she "overdrew" the account. We encourage her to keep a written ledger of her transactions and keep a running balance.

*We add 10% interest based on the ending balance on the last day of the month. i.e. if she had $5.67 at the end of the month she would get an additional $ .57 added onto our next deposit. If she saved more than she spent, on average we would be putting $5 - $10 EXTRA each month as "interest".

We hope by holding her accountable with consequences of overspending that this will continue to teach her to keep track of her spending so that in the future she is not getting NSF fees, etc. on checking accounts and other accounts when she is refining her gift of shopping.

A really great thing about this card is that we can hold her accountable for her purchases because we can view the statements of her transactions online. Without divulging too much, a couple years ago our daughter spent money on a service she shouldn't have and without us having this card, we would not have discovered it in a timely matter to hold her accountable for something that could have affected her future. Of course she was upset at the time of intervention, but since she is a few years beyond has acknowledged our wisdom in stepping in and has thanked us.

She is heading to college in the fall, and the prepaid spending card can go with her and we can load this for emergencies, her monthly allowance etc.

Most banks offer this card for use "indefinitely" if the account is opened prior to the child turning 21.

We anticipate we'll keep hers open until her 25th birthday, graduation from grad school or when she gets married - which ever comes first.

Hope this helps...

Wendy Stewart-Hamilton
DallasGal for Dallas, TX