Comparing Reloadable Debit Cards for Teens

Recently Kim Kardashian stepped off the red carpet in order to introduce her debit card for teens, and her efforts were met with a bit of an outcry. But the truth is Miss Kardashian is hardly a pioneer in this area. Relaoadable debit cards have been around for a while, and have been used by many parents to teach their kids financial management skills, or just make giving allowance easier. We'll give the Kardashian Kard a fair shake, but let's look at a few other options first.

Wells Fargo Teen Checking--

This option is more than just a debit card. What it really is giving your teen a joint checking account, which they share with a parent. A debit card is included. Just like yours. This option can be good, depending on your kid, not to mention the parents ability to keep track. The option is targeted towards 13-17 year olds. I'd personally be a little nervous about putting a 13 year old on my account. It also means banking with Wells Fargo yourself.

Yes, there are parental monitoring services, but are they enough? Parents can set daily spending limits and control ATM withdrawls, which is nice but the account can be overdrawn-- unlike many of the other pre-paid cards that just won't go through if the money isn't in the account, Overdraft protection, attached to a savings account is available, but not automatic.

The overall cost factor here is not clear cut. The actual account is free, but any overdrafts will cost money, and plenty of it. Overdraft protection also costs money, although not as much as an overdraft. There is also the ATM fee factor, if the teen regularly accesses ATMs that are not owned by Wells Fargo. But if your teen avoids the ATM, and doesn't overdraw the account it can be a pretty sweet deal, if you're already a Wells Fargo customer and have had a good experience with them.

Overall Assessment-- Make sure your teen is ready, and make sure you check on it. This is a training wheel checking account, and once your teen is 18 the trainers come off, and he's on his own.

VISA Buxx Card

Visa Buxx has been around a while, and is affiliated with several major banks, including US Bank. I checked into it myself when my kids were young teens. With Visa Buxx there is an initial charge for the debit card $10-20 depending on whether your teen custom designs the card. There is also a $4.95 monthly fee, and a 50 cent reload fee. ($71.40 annoual cost if teens are paid twice a month by parents) This doesn't include fees charged for withdrawals from ATMs which vary.

The good news is, the teen cannot overdraw this card, but if your teen's allowance is relatively modest, it may not be worth it. If you're handing your teen a $20 on payday, you might want to just keep doing that rather than giving them this card. They won't be able to shop online, and you won't be able to track where they spend their money, but your teen likely won't care, especially if it means he can pocket the extra $6 you would've spent on card fees.

WalMart/ Green Dot Student Money Card

Walmart Money Cards, while carrying a Mastercard or Visa logo, are designed largely for Walmart customers who do not have other bank accounts, and the student version of this card is similar. The minimum amount that can be loaded on a temporary card is $20, the maximum is $500 -- unless you are cashing a check at Walmart. However, the temporary card will cost you $6, and can only be used for shopping.

The monthly Maintenance Fee is $3.00, which isn't too bad, but there are a lot of nickel and dime fees as well -- like $1 to check your balance on an ATM, $2 for teller transactions, various check cashing and reload fees, which are reduced or eliminated with Direct Deposit from an employer.

Paypal Student Card

Paypal Student Account is almost equivelent to a Personal Paypal Account. There is no monthly fee, no set up fee, and no fee to get the actual debit Mastercard. There are standard fees for ATM transactions, including a $1 fee from Paypal, but if ATMs aren't used, no fees. Parents can set up automatic transfers from their own paypal accounts, which are free. Transfers are also free between other people who have student accounts under the same parent.

For example, 16 year old twins Judy and Joan both have paypal student accounts and Judy needs $5, but can't get ahold of Mom, Joan can go in and transfer the money without being charged. And mom can review the whole transaction later. Credit or checking accounts can be attached to the student account as well -- or not. It's up to the parent. Fees are accessed for converting foreign currency, or if Aunt Mathilda wants to send a little money to the girls, but strictly as an allowance system, it's pretty efficient.

Kardashian Kard

The Kardashian Kard is actually quite similar to the VISA Buxx card, only with even higher fees. Cardholders startt by purchasing the card for either 6 months for $59.95 or 12 months for $99.95. After that 6 or 12 month period, the monthly fee is $7.95. The Kardashian Kard is not marketed exclusinvely to teens or young adults. The cardholders need to be over 18, but a companion card may be issued in a teen's name.

One feature that is unique to the Kardashian Kard is the Mobile Mone account associated with the card that offers some extra protection in case of theft. Cardholders can keep a small balance on the actual card, like $10 the upside, if you want to call it that, is that , while the real miney sits in the Mobile Mone account. If the cardholder sees a "must have" item, all they need to do is send a mobile text message and their Mobile Mone is instantly transferred their debit card.

Upside Card

The Upside Visa card in designed to meet the needs of 13-25 year olds and their parents, and has slightly different guidelines for those under 18 versus those over 18. One thing I really like about this card is that it outwardly recognizes that 18 year olds aren't magically mature. Online checkwriting is the notable feature teens gain when they reach 18, but the checks are normally for bills, rather than impulse purchases. The teens write the checks online, but Upside mails them, so it doesn't exactly work for pizza at 11pm the day before payday-- or any other impulse purchases like theat.

There are actually three different plans, Upside Clear which is free, but has no ATM access. Upside Access is $2.99 a month, and includes ATM access, and Upside Edge which also includes ATM access, is $29.95 per year, with 1% cash back bonuses on funds loaded. Cash back bonuses can exceed the $29.95 per year.

The Access and Edge cards also include online check writing for those over 18, and all of the accounts can be loaded for free from a parent's checking or savings account. Credit/Debit Card funding is charges a $2.50 convenience fee.

Of course, ultimately, the decision on whether or not you want to consider a reloadable debit card for your teen or young adult is up to you. The whole thing may seem like a great idea, or more hassle than it's worth. But if your teen is active, and relatively mature, the plastic option is definitely something you might want to check into.

Sources:

Wells Fargo Teen Checking

VISA Buxx Card

Paypal Student Card

Upside Card

Kardashian Kard