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College student ID doubling as prepaid card

Grading prepaid student IDs

The prepaid functionality adds purchasing power to a student's trusty school ID, a card many college students always carry.

"It makes it that much easier for the student," says Madeline K. Aufseeser, a senior analyst with Aite Group, a Boston-based research and advisory firm for the payments industry. "They only have to carry one card along with them."

Students can use their prepaid campus ID cards to pay bills, shop online or withdraw cash at local ATMs. And because the cards are prepaid, students can only spend the amount loaded on the card.

"You can't overdraft," says Terry Maher, general counsel for the Network Branded Prepaid Card Association. "If there's no money on the card, it declines the transaction."

However, it's smart to review any financial components to your college student's ID card. Here are some details to research before signing up.

  • Can your student use the card to make purchases on and off campus?
  • Can the student ID card be linked to a checking account?
  • Can your child receive his or her financial aid refund on the card? How else can the card be funded?
  • Are there any fees associated with the card, including fees for loading money, monthly maintenance, inactivity, card replacement or ATM withdrawals?
  • Will the funds be replaced if the card gets lost or stolen?

"Take the time to read through the terms and conditions of prepaid cards," Lent says. "Not all prepaid cards are created equal. Some have fees. Others don't."

Before signing up for a student ID that functions as a prepaid card, consider your student's other financial options. Would your child be better off with a student checking account and debit card from a local bank or credit union?

"They don't necessarily have to take the university card. Check and see if the product being offered by the university is competitive," Maher says. "If a student already has a bank account, they might want to use a debit card."

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