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Anchor intro: Credit cards offer convenience,
and on this plastic planet, they just may be more common than cash.
A growing group of credit cards users -- teenage shoppers! But teens
and credit cards doesn't have to be risky business, as Bankrate.com
explains.
Voice-over 1: Alexandra is a high school teenager
with spending power. When she pays, she often pulls out her plastic.
But does she pay that monthly credit card bill?
SOT: "The name on the card is my name,
but it's through my mom's account, it takes money of her account,
not mine."
Voice-over 2: While paying the bill herself
might be a better lesson, at least she's getting a feel for how
cards work before she goes to college -- where it's easier than
ever to get her own credit card in her own name. Her mom knows first-hand
that can be trouble.
SOT: "...she was telling me about how when
she was younger and how she got into debt using her credit card…
and how she wants me to learn while I'm still young and not paying
for it."
Voice-over 3: So how do you teach kids about
money without giving them a credit card and risking a debt dilemma?
Use one of the new generation of cards designed for teenagers as
young as 13. Think of them as credit cards with training wheels.
Voice-over 4: They're called "stored value
cards." You load the card with money, then refill it as needed.
Voice-over 5: Prepaid cards supply a monthly
statement showing how your teen spent the money. You can refill
the card on the Web or by phone -- perfect for students away at
college.
Voice-over 6: Drawbacks? Losing the card can
be like losing cash: depends on the card and the issuer. Some prepaid
cards charge annual fees, as well as refills and ATM transactions.
And you're teaching teens a mixed message -- that using plastic
for everyday expenses is OK.
Standup: If you'd like to see what's out there
in the land of prepaid plastic, we can show you some sites. But
beware the hype. Read the fine print, and consider both risks and
fees before you sign up. For Bankrate.com, I'm Kristin Arnold.
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