Creditnet News Story
Prepaid cards offer alternative to co-signing for credit accounts
Tuesday, March 23, 2010
By Thomas Astery
A New York Times report notes that parents who don't trust their children with credit cards may consider prepaid products.
A recent report suggests that parents may consider using prepaid cards in order to teach their children about money and credit.
According to the New York Times, some parents may not trust their children enough with money in order to co-sign for a credit card or put them onto one of their accounts.
While in the past it was much easier for young people to accept credit card offers, new federal regulations require co-signers for people under 21 who want a credit card. That rule applies unless the young person can prove they have the means to support having an account.
The Times report said that parents who don't want to give their children access to credit may try products like prepaid cards. Though the cards may come with fees, they also give parents more control over their children's spending.
"For kids who've had trouble setting their own limits, this may be an option that offers parents peace of mind," the report said.
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