Newspaper article The Christian Science Monitor

Teen Spending Meets the 'Stored-Value Card'

Newspaper article The Christian Science Monitor

Teen Spending Meets the 'Stored-Value Card'

Article excerpt

Parents may employ widely different tactics in navigating the complex issues of the teenage years. But when it comes to monitoring teen spending, many agree: You can't be too vigilant.

Some of the biggest credit-card companies have created products over the past year that they say will help parents keep tabs on their offspring's outlays - and also help teach teens about managing money.

Prepaid stored-value cards look like credit cards, but they're not. Parents fund the cards by calling a toll-free number or going online to transfer money from a bank account or from a credit or debit card of their own.

Interest appears high. About a half million people visited a website set up to promote Visa's Buxx card (www.nc.visabuxx.com) within two weeks of the card's September 2000 launch, according to Kenny Thomas, director of corporate relations at Visa USA. The company now gets 5,000 to 6,000 requests a day for information about the card.

Visa has also launched versions called PocketCard and M2card. A stored-value card from American Express, the Cobaltcard, is being introduced nationwide. And MasterCard reportedly has a version in the works.

Depending on the card, certain kinds of purchases - such as cigarettes - can be blocked. ATM fees, cash back at point of sale, and other costs and services vary. (For a detailed, card-by-card comparison, go to www.bankrate.com and enter "stored-value cards" in the search field.)

"Managing personal finances is a necessity for today's teens, who spend more than $153 billion a year - mainly cash," says Jeff Kann, executive vice president at Visa.

Proponents of the cards point to their main advantage over cash: Using the cards requires a personal-identification number, so the impact of a lost of stolen card is clearly lower than that of lost cash. …

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