Things to Know About Prepaid Cards

Dedicated financial professional Jerome Arthur Uffner is the senior vice president of Fidelity National Information Services (FIS). Having worked in the payment solutions sector throughout his career, Jerome Uffner is experienced with everything from mobile payment technology to prepaid card technology. Here are several things you should know about prepaid cards:

They act more like debit than credit.
While prepaid cards spend like credit cards, they are not backed by credit. Rather, they are most similar to debit cards in that you are spending your own money, not borrowing someone else’s. You don’t need a bank account of prepaid cards, either, and must load money directly to them in order to make purchases.

They make money management easier.
Saving and spending your money responsibly requires that you build a habit. Having a prepaid card helps you to develop this habit because you cannot overspend on your prepaid card. Having this limit forces you to be more disciplined with money.

They do have fees.
Unlike a credit card, you will not pay interest on a prepaid card, but that doesn’t mean it comes without fees. Some prepaid cards have inactivity fees, monthly fees, and transaction fees. These are often hidden, so make sure you take the time to look into them fully.

Why Get a Prepaid Card for Your Teen

Based in Georgia, Jerome Arthur Uffner has built a successful career in the payment technology services sphere. The former president and CEO of FirstView Financial, he now leads Fidelity National Information Services (FIS) as senior vice president. Throughout his career, Jerome Uffner has focused heavily on the prepaid card sector and its growing popularity, particularly among teens.

For a long time, prepaid cards have been advertised as a great way for teaching teenagers responsibility and independence without taking on too much risk. Teenagers are still growing, so they often lack the maturity needed for a full credit card. However, prepaid cards are not credit cards, so there is no risk of harming either your credit or their credit. Teens cannot rack up excessive debt on a prepaid card, and is there no chance that either you or they will forget to make a credit card payment.

In this process, teens can learn how credit works in a safe environment. With a prepaid card, teens recognize that swiping their card has real-world consequences. While this doesn’t mean that they’ll rack up debt each time, it does mean that they’ll run out of money.

Since the consequence of running out of money is a real situation that teens must deal with when having a prepaid card, they naturally start budgeting. As a parent, you can provide them with a specific allowance each week or month. Making that amount last until their next “pay day” requires budgeting skills.