Parents and children just can't ever stop tweaking their allowance arrangement to perfection. And here is the newest edition of it - prepaid debit cards. Parents create an online allowance account for their child, and keep it topped up for as much or as little as they'd like. The child feels empowered too, and could use it online or at ATMs. And since these are made for the allowance-granting parent to make it easier for them to see exactly what gets spent, an itemized bill of everything the child buys is always at hand, so that they can offer words of advice. But it certainly doesn't look like parents are going to get any more control now, having given their children their own card. What stops them from just buying whatever they want? It just allows children a free hand, with none of that bothersome thing called responsibility. When children run out on prepaid debit cards, they just call their parents for a refill.
They make these prepaid debit cards especially for the allowance arrangements that families have. MasterCard calls it the Allow Card. And they give you, the parent, a plethora of parental controls, more than two dozen, to control everything by remote. If the parents these products are aimed at, actually manage to wrap their heads around these electronic tools, they might wonder one day what they are doing giving their children a free hand with money, when clearly, at this time, they need all kinds of control and supervision. But that is not the only reason why these cards are not such a great idea. These are expensive to run too, being weighed down with all manner of fees and add ons. MasterCard Allow Cards, for example, come with an activation fee, a monthly maintenance fee, a cash withdrawal fee and so on. For what is essentially a debit card, this is quite preposterous - charging you to use your own money.
What it can be useful for, is as a halfway step to keep at least a little supervision on how much Junior spends, when he has demonstrated a little financial responsibility with his own money, earned doing a few chores. You could use the prepaid debit cards to hold the cash your child makes on her own. The best thing, anyway, would be to have a child have her own checking account to manage her own income with. This is not to cut them off as soon as possible or anything; it only teaches them the responsibility they need to see how the money comes in and to see how it goes.
People usually prefer prepaid cards because it is so easy to overspend. But the problem is, when the money is invisible, inside the card, you might end up spending what you have rather too quickly. I guess it all comes down to how much personal responsibility one wishes to exercise.
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