Reloadable Credit Cards – Checking Account of the Future
You know those reloadable credit cards that act almost like a real credit card with some minor differences? What if that becomes how we manage our finances in the future?
I was cleaning out my purse the other day – something I do regularly before I go on the road. My friends know I am not a fan of large purses. I like to travel light. That means that there is no room for fluff in my small, little purse. However, I came across a slip of paper folded in half and jammed down low in the money fold of my wallet. It was a spare, blank check from my account that I put in there quite some time ago for emergencies.
Quite some time ago means…over two years ago. I have not needed it. I haven’t written a single check in that time. All of my money is handled electronically. The checking account is just the place my money is held and from which I direct my bank to send bill payments. I use the onine service to move money around as needed. But – I never write checks. See the irony? The name of the entire deposit product has to do with checks and I never use them.
I can’t be the only one who has a checking account and does not write checks. Considering the number of places that take debit and credit card transactions and that I can send money straight out of my account without having to write a check or address an envelope, it is highly possible my children will never write a check in their lives.
As a result, I am looking into using reloadable credit cards or a prepaid debit card for kids in order to pay them their allowance. The cards are not really credit accounts and there is less risk of being charged excessive fees. I can much more easily transfer money from my account to their cards than I can stop by the ATM to take out the cash I am always forgetting to pay them. (Sounds like I just dole out money to my kids – I assure you they earn it and I pay very low wages.)
These reloadable credit cards – also called prepaid credit or prepaid debit cards – provide almost all of the same services as a traditional checking account. They offer bill payment services, online account access, ATM transactions, money transfers and monthly statements. Additional benefits include no credit check, multiple ways to load money onto the cards, no overdraft fees, and no minimum monthly balance requirements. The cards can only be used for up to the amount of the loaded balance.
In a way, I may be doing them a favor. While I want them to learn the value of a dollar and that hard work should go behind every dollar earned, I also want them to be exposed to how they will need to manage money in the future. Having them deal in only cash or using my card information for their online purchases probably will not teach them the skills they really need to develop for financial independence – the ability to handle their own money electronically.
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