Credit cards Updated:
If your children are about to head off to university, one thing could well be at the forefront of your mind – just how will their finances cope? It could well be the first time that they've been wholly responsible for their own spending, and the lure of the student loan will mean it's all-too tempting to spend it before they've actually had the chance to budget for essentials. That's where pre-paid cards can come in.
A pre-paid card can be loaded with a set amount of money that the student in your life can use for essentials. They'll have easy access to the funds they need, and unlike with traditional credit cards, there's no way to rack up debt – they can only spend the amount loaded onto the card, and after that, they'll either have to put more money on it or keep it stashed in their wallet.
There's no way to overspend on them and for that reason they can be a great alternative to debit cards, as you needn't worry that your child will spend everything in their current account in the blink of an eye. These cards can be re-loaded quickly and easily and in many cases can be managed using smartphone apps, making the whole process incredibly simple. The app means that students and parents alike can also keep track of the level of spending, much like with regular online banking, so there's less chance of the money being spent frivolously.
"Providing students with a pre-paid card will give parents the peace of mind of knowing that their children aren't running up massive debts or dipping into their overdraft whilst at university," said Ajay Sethi of PrePay Solutions. "Pre-paid cards are also a useful way for young people to learn about budgeting, since they can easily see exactly how much is being spent, as well as when and where.
"This way, students learn to keep a close eye on their finances, but parents don't need to worry about their children running out of funds halfway through the year, since the card can be re-loaded with funds at any time."
Think you could benefit from the flexibility and convenience of a pre-paid card? They're not just for students! People from all walks of life could find these cards beneficial as a way to budget and stay out of debt, and not only that, but pre-paid travel cards can be ideal for the world traveller. Want to see if they could be for you? Check out our best buys to track down a few options.
Remember, in order to secure a mortgage, credit card or personal loan you need to have a good credit rating. To find out if yours has a clean bill of health, contact a credit check provider, such as Experian CreditExpert to investigate your credit report.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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