Pros and cons of prepaid debit cards

Woolf recommends carrying a prepaid debit card and a low-limit credit card for emergencies.

Teaching kids about money. Prepaid cards can teach kids how to spend money within set limits. That's the purpose behind the website It offers prepaid, reloadable debit cards that track teen spending and allow parents to control. Every time the card is used, an instant text alert shows parents how much money was spent and where. Parents can even instantly lock the card or load emergency funds onto it.

"The card empowers parents to help teens develop smart habits," says Evan Jones, vice president of "When you give a cash allowance, you don't know what happens to it." The typical monthly amount loaded on the card is $50 to $100.

The card does have fees, including a $3.95 monthly service fee (after one free month) and a 75-cent reload fee.

Preventing data from being stolen. As data theft soars, prepaid cards are a good stopgap, Dvorkin says. Because your card isn't linked to personal data like Social Security numbers or bank account data, there's no information to steal.

Prepaid cards also are a better way to buy online because you can protect yourself against consumer fraud, Dvorkin says.



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