4 Reasons a Student Should Get a Prepaid Credit Card

Prepaid credit cards are an increasingly popular way for students to take control of their finances once they have left home and entered the real world on their own. There are a few different reasons why these cards come in handy including: easy to get money to the student when needed, protects the student's money, limits and tracks spending and reporting to the credit bureaus.

Easy to Get Money to the Student

When a student and their parent get a prepaid credit card on the same account, the parent can go load the account with cash and the student can use it. It is a quick and easy way for parents to get money to their student. It is more cost effective than a money transfer and timelier than a deposit in a traditional bank account. Parents have several different ways they can load the card with funds to ensure the student has the money he or she needs at all times.

Protects the Student's Money

Many of the prepaid credit cards come with the same loss and theft protection as traditional credit cards. This makes it safer than cash because if the student's wallet is lost or stolen, the money on the card is still available, and if the card has been used, the money is protected from unauthorized use.

Limits and Tracks Student Spending

Since there are maximum amounts allowed to be loaded on the card and used each day or month, a prepaid credit card helps to limit the student’s spending. With these limits in place, the student can work toward developing and sticking to a budget. The online account attached to the card will allow both the student and parent to track spending and see where the money is being spent. 

Reporting to the Credit Bureaus

One good reason to get a prepaid credit card is that some of them report to the credit bureaus. It is important to look through the cards terms and conditions to ensure that it will report, because most of the prepaid cards will not. This is a major advantage for students because it will help to establish a positive credit record. Having a positive credit rating from an early age will make it easier for the student to establish loans for college, get a car, and get a house in the future. 

No matter why parents want to get a prepaid credit card for your student, there are many different benefits. The important thing to remember is not all cards are created equally, so parents and students should look at several different card options together to determine which one is the best for their situation. 

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