May 19, 2009
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News: Credit Card Teaches Kids Responsibility
Credit card companies are searching for solutions to solve parents’ woes on how to meet their teen’s needs and still teach them how to manage a budget. Some financial organizations have explored a new pre-paid card option which gives parent’s greater control while teaching the fundamental basics of managing your dollar to their teens. Discover offers a new card for teens that give parents total control. The pre-paid credit card allows the child to use the card at local merchants designated by the parents. The parent also stipulates the limit by depositing a designated dollar amount into the account. Credit card provisions prohibit the teens from using the card in off limit venues such as liquor and tobacco stores. With the new Discover card, the parent sets the account up and deposits an amount of up to $200. Parents have full control by setting dollar limits, tracking charge transactions, and creating message alerts for every transaction the child does. For teens that have jobs, an automatic paycheck deposit is also available.
As with all credit cards, the pre-paid card shares the same vulnerability to theft. As an added benefit, parents can be assured the card is protected. The Discover card is fully protected from fraudulent activity. So while the card comes with the same safety mechanisms, the teen is learning a valuable lesson on managing his money. There’s more. The pre-paid credit card also comes with a rewards system. Children can earn in-store coupons from their favorite merchants like movie theaters, fast food restaurants, and online discounts. The card comes with a $5 monthly fee or a $50 annual fee whichever the parent desires.
The card is a unique way of teaching a financial lesson to kids while Discover grooms future customers and builds lifelong relationships. The scenario is clear; the card offers benefits for all three parties involved and most likely will serve to reduce some tension between parent and child. The new marketing strategy is sure to catch on quickly as we will surely see more credit card companies looking for ways to gain their share of the market.