Beware of Bieber: Debit Cards for Children Can Spell Trouble

When it comes to paying your children, you’ll consider allowances. But thanks to Justin Bieber and other celebrities, prepaid and credit cards are grabbing the attention of children nationwide.

Bieber, Hello Kitty and even Elvis Presley have cards with their likeness on them. That means you’ll have to figure out if there’s a suitable plastic option for your child, whether they’re 15 or 7 years old. Children see their favorite star endorsing a card and not the costs of using it. You’re the parent, so you must do the legwork.

Justin Bieber

Justin Bieber, Hello Kitty and even Elvis Presley have cards with their likeness on them.

While some of these cards may be a great fit for you, not all of them are consumer-friendly. Kim Kardashian’s prepaid debit card got nixed and even got labeled “predatory” by Connecticut’s attorney general.

Potential costs

Activation fees
Getting a prepaid card isn’t always free. Sometimes starting an account costs you a few bucks.

Monthly or annual fees
Sure, Russell Simmons RushCard is “cool,” but for $9.95 a month? There is a $0 per month pay-as-you-go option, which is a far better alternative to almost $120 a year just to have the card. To be as hip as Bieber, you’ll pay $3.95 every month.

Fees to load money
A prepaid debit card is useless unless you load it with money. Not only do you have to be a proactive consumer, you’ll pay for it. Cards that charge you for this apply a fee between $0.75 and $2.95.

Balance inquiry fees
Suppose you think you’ve made a slight accounting error and you want to check the prepaid card balance. Be ready to pay for it. Check your Bieber card balance at the ATM and pay $0.50.

ATM Fees
Withdrawing money from your prepaid card at an ATM could cost you, too. You’re basically getting charged for storing money on your card that you’d like to have in hand.

Inactivity fees
Maybe the Bieber card just isn’t age appropriate anymore and little Jenny grew up, so she’s ready for a big-girl credit card. Well, make sure to deactivate the prepaid card before you get smacked with a $3 inactivity fee after 90 days without using it.

Take note that there are pros and cons of prepaid debit cards beyond the fees. But if it’s just your child’s wish to have a flashy, hip prepaid card you should think twice before signing up for one.

Photo courtesy jake.auzzie