Virtual Debit Cards: Lock And Reload

Parents have a new tool in their financial arsenal today. This tool can keep the teenager or the college student on track with their expenses. Many banks are offering a virtual debit card with a preset spending limit. The limit is based on how much money is deposited into the account. These reloadable debit cards can teach young folks how to plan and budget their money. Should the money run out they will have to wait until the next deposit before they can spend any more. This is putting a big smile on the face of parents today because they no longer have to let their college student possess their credit card for the duration of their studies.

A young person can have their own card today and link it to their savings account too. They must have a parent with them at the bank when they apply and be between the ages of 11 and 16. Once they turn 16 in the U.K. and elsewhere, they can handle their own financial affairs. Having one of these types of cards gives them the benefits of making a variety of purchases without having to own a real credit card. This is a powerful tool and teaches them the value of saving and the pitfalls of spending.

Another financial tool for parents is prepaid gift cards. Unlike the reloadable debit cards, the prepaid gift cards are used until the money is gone and then they are simply thrown away. Prepaid gift cards have enormous potential. If you cannot think of that perfect gift for someone then give him or her, a gift card. If you know they like books, you get them a gift card good at Barnes and Noble. If you do not know what they like then purchase them a visa gift card. Denominations of $10 to $100 are available at most retail outlets.

The best advantage to owning a gift card is one flat fee. For instance, when you purchase a $100 gift card it will cost around $105 with the flat fee. However, there are sometimes transaction fees with a reloadable debit card. These fees can add up to more than 5 dollars over the course of a month. For that reason, some parents are finding it easier to purchase several gift cards for their college students and then mailing them out once a week.