The question of whether young people need a credit card arises at the latest when they are planning a stay abroad, for example. More and more young people are taking advantage of the opportunity to spend time abroad or after school to gain experience here. These stays often last for several months and it would not be advisable to have so much cash with you. Withdrawing money with an EC card can also be expensive in the long run. A credit card is a very good alternative. However, it is of course not beneficial for young people to have a framework that they can easily use. It is therefore advisable to use a credit card when looking for a credit card for young people. The prepaid cards are also called prepaid cards and have no limits.
Prepaid cards – this is how they work
Similar to a prepaid cell phone, the basis for prepaid credit cards is a credit that has to be topped up. For example, parents of children can order the card in the child’s name. A reference account will then be given. The credit goes to the credit card from this reference account. The amount is determined by bank transfer. This is why the expenses of the young people can be so well supervised and there is no nasty surprise when paying with a credit card.
When the amount on the card has been used up, the card can only be used again when it has been recharged. This prevents liabilities that cannot be paid by young people.
The advantages at a glance:
- Cost control for parents and children
- Pocket money can be booked directly on the card
- The young people can use the card on school trips or on vacation
- The card can also be reloaded at a distance
- The card can of course be blocked if it is stolen
These costs can be expected
The cost of the card is significantly lower than with a classic credit card. While with a classic credit card, annual fees usually have to be paid and interest is due if the amounts are not paid back in time, the prepaid card can also be used completely without fees. Here it is worth comparing the offers of the providers with each other. Fees that are due, for example, when withdrawing money abroad are deducted directly from the credit.
Note: Basically, the credit cards for young people who are used on a credit basis have the same functions as classic credit cards. However, there are restrictions. It is the case, for example, that rental car providers do not accept the card. The reason for this is that it is not clear whether there is cover on the credit card. Even if there is little credit available, the providers cannot see this and therefore run the risk of being left at their own expense. There are also some hotels that do not accept prepaid cards.
Issuing credit cards
Even though prepaid credit cards are designed primarily for young people, there are still some banks that do not issue their cards to customers under the age of 18. In this case, it is necessary that the parents agree and sign it as a kind of guarantor . This serves as security for the banks. Especially with young customers, it is not clear whether they really have enough options to use a credit card and to be able to pay the costs. With the signature of the legal guardian, it is ensured that the bank may not have to bear the costs itself or may take a long time to get the fees paid. Except for this problem, credit cards are still a good solution for young people.