Parents are often uncomfortable with the idea of their kids having their own credit cards. But if you have a child who’s about to enter college, this is the perfect time for them to learn about how to handle credit and debt repayment responsibly. More importantly, this is their chance to build their personal credit history so they can be prepared for the financial challenges they will face in the coming years.
In this article, let’s talk about prepaid debit cards and how these cards can be the perfect tools for building early credit history and for teaching kids about proper credit management.
Prepaid Cards – How They Work
Prepaid debit cards are another form of cashless payment. These cards can be used for buying items in stores, supermarket, diners, and other establishments. Prepaid cards can be used to shop online as well. What makes it different from a traditional credit card?
As a prepaid cardholder, you will not be given a credit line. This means, you need to deposit cash into your account before you can start paying with your debit card. When you run out of funds, you will not be able to charge expenses to your card. You must submit a new deposit before you can shop with your debit card.
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