For you parents who love the idea of your kid spending your money, your moment has finally arrived. Now that I'm aware of BillMyParents, I sure am wishing the years away and I'm excited about my daughters, 7 and 9, someday becoming teenagers, so we can sign up for this reloadable prepaid MasterCard.
I've been asked to weigh in on what I think of BillMyParents, which in recent months has been advertising in places like MTV and ESPN. And, well, as I hope it's clear, I'm truly psyched, unlike one of my colleagues, CardRatings.com managing editor Amber Stubbs. When she first heard about it, she inexplicably quipped, "I'm not sure if this is the message I would want to send to my teenagers. I'll need them to create a GetAJob Reloadable Prepaid MasterCard for them."
No offense, Amber, but I think you're a little off base. I mean, c'mon, it's a great message. What parent wouldn't want to encourage their carefree teen to run up a tab and let Mom and Dad foot the bill? I can just imagine the next wave of reloadable prepaid cards that credit card companies could start marketing to teenagers and their impressionable parents:
- The CleanMyRoom prepaid card. Every time the teen maxes out the card, the parent cleans the teen's room.
- The BuyMyCar prepaid card. The parent funds the card and the teen makes the car payment, getting the grown-up feeling of what it's like to pay for a car, without actually incurring any financial pain.
- The SpringBreak prepaid card. This card lets the teen travel anywhere they want and spend until the card is dry. (Even better, parents, because you're the one responsible for your teen's behavior, if your little darling trashes a hotel room, or is caught buying liquor with a fake ID, your teen won't get in trouble, you will. Phew.)
True, the folks at MasterCard promote their new prepaid card as a tool to encourage financial education. As their website explains: "The purpose of the BillMyParents Card is to provide parents with an option for teaching financial responsibility and budgeting while giving the Teen control over their spending without severe repercussions, like overdraft and over limit fees."
I can't argue with that--the way it's worded, who could? In fact, before this card came along, I had been thinking that when my kids are someday approaching the age where they're ready for a credit card, I'd co-sign for a small credit line and take my chances, or better yet, that we would just wait until they're 18, and then my daughters could apply for their own student credit card that's designed to help them build credit. And I figured I'd show them tools like credit card calculators, so they could get a sense of what can happen to out of control debt.
But instead, I'm just going to wait until the girls are a little older and let BillMyParents show them how it's done.
Really, there are so many ways a prepaid card can help teach your kids about money. There is so much to learn.
For instance, while some consumers prefer using prepaid cards to rebuild credit, you'll want to teach your kids that prepaid cards--despite it being your own money on the card--come with fees, and that it's important to distinguish between reasonable fees and ridiculous fees. When I use BillMyParents as a teaching tool, I'm going to teach my kids about:
The monthly service fee: There is none during the first month, but after that, there will forevermore be a monthly charge of $3.95.
The ATM withdrawal fee: It's only $1.50! Every time!
The ATM balance inquiry fee: A mere 50 cents.
Loading fees: Every time we put money on the card, depending where the money comes from (i.e., my bank or my own credit card), I will be charged 75 cents, $1.50 or even $2.95.
Replacement fee: $7.95, but not to worry since teens never lose anything.
Of course, my kids won't care about these fees. It's not their money.
Which is fine with me because young adults have enough to worry about without stressing over fees. Take the ATM insufficient funds/decline fee, for example. Imagine, if my teen spends a little too much, which would never happen, and the card is declined, I'm only out another 50 cents.
I'm beyond excited about this card. In fact, this will probably help my own bottom line and career because it sounds like a great motivator for me to start working longer hours, so I can put plenty of money on the card.
I sure wish this had been around when I was a teenager.