Recently credit card companies have been trying to find a new way to encourage new consumers.  The method has been credit cards for minors, but is this a good idea for you as the parent?  There are many pros and cons when you consider credit cards for minors.  Let’s look at the entire situation.

Credit card companies have been advertising that credit cards for minors are convenient, appropriate, and allow you to control the teen better than giving them the money, but is this just a con?  Yes the credit cards can be more convenient.  They allow the minor to go out at get what they need or want.  For example if you have ever needed your teenager to pick up some groceries what did you do? Did you give them a list or try to send them to the store with the credit card in your name?  Most of us just pull out the card and send them along, but now with the regulations on credit cards being a little bit tougher it can be more difficult to send the child out with your credit card unless the name is the same, as in first and last.  So offering a credit card for minors in their name can be more convenient to you and them.  You are still going to have to co- sign with the company in order to get the credit card, so that is a consideration as well.  If the child is responsible enough to have the card you shouldn’t have to worry. 

The downside to credit cards for minors is the trust that is needed.  Some teens can handle the card being for emergencies, but for some it is a ticket for free money that they are not responsible for.  This could get you further into debt or worse ruin their credit.

Most of the credit cards for minors are going to be prepaid cards.  Prepaid cards allow you to set up an account to transfer money as they teen needs it.  This means that the balance is under your control and you already have the money to place in the account.  These cards work much like an ATM card.  The difference is the fees.  There are start up fees, transaction fees, monthly fees, and reload fees depending on the card you choose.  Obviously the one with the least amount of fees is going to be the best for you and your minor.  The card is going to have their name on it so that is an ID form as well as a handy tool for them to get a little lunch or other item they may need. 

Since these cards are like ATM cards the money has to be in the account before you can use them.  There can be a few issues like why should you have to pay for the card if you can just get an ATM card.  Again it is control, but on the other hand an ATM card allows for a larger balance than you might want them to have.