College can be a tough time for parents. First, you see your children leaving the protection of home where you cannot monitor their lives. It is a struggle giving up that power and not knowing if your children are in danger. Second, the college years is an expensive time when money always seems tight. You do not want them getting into student credit card debt, but you want them to have something in case of an emergency. Unsecured credit cards are everywhere but may not be the right answer to helping them learn financial responsibility. Why not try prepaid credit cards as a solution?

Prepaid credit cards are very similar to unsecured credit cards and can be used anywhere bank credit cards, MasterCard or Visa credit cards, or debit cards can be used. The difference is that the prepaid card acts more like a debit card. You deposit money into the account and your child can only use that amount. There is no need to worry about them going over the limit and you can track how much money they are spending on a monthly basis. An additional bonus is in knowing that your child is learning how to manage their money.

So why use a prepaid credit card instead of bank credit cards? The first reason is that a bank credit card can exceed the balance in the checking account if it is linked to the account. This can cause over limit fees to rapidly accumulate. A bank credit card, if it is not tied to the checking account, is reliant upon credit scores. If your child has not established a credit rating, then he or she can be turned down. Each time a lender runs a credit card application, the credit score can be harmed and lowered. This perpetuates the cycle of applying and then the subsequent denial, based on the credit scores.

Prepaid credit cards are great gifts to give your child. He or she can learn how to manage their money wisely and you can control how much money they have to spend each month. There won’t be interest rates tacked onto the purchases and once the money is gone, you can upload more money without worrying about increasing the spending limit beyond what they are responsible enough to handle.