This is an interesting question that’s currently being debated over the internet as financial institutions target their marketing strategies towards the youth market with student focus credit cards. Financial Institutions understand that the youth market is one of the largest driving forces for spending, but

I believe the really question is, are the teens ready to handle the responsibility of a credit card. With surveys from the US seems to indicate teens not ready yet, in a recent poll found 11% teens acknowledge that their parents make the monthly payments. 15% had made the minimum repayments and 2% had intentionally missed their monthly repayments. [Article can be found here]

Just based on the above results show that there’s a serious need to educate teens about financial planning and personal accountability. Though Parents need to follow suit and show a little bit of Tough Love no use having systems in place when Mom and Dad continue bail their children out of debt.

Where do prepaid cards fit in?
I see the prepaid credit cards being little like training wheels on my first bike. Teens gain access to all the features of a credit card, their own card, freedom to make purchases online and offline. With the only risk involved being zero balance, though teens begin to understand the value of money.

The magic bullet comes back to education, as soon as Teens understand the value of money they’re spending habits will change.

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