College is a time for learning, not just about specific courses, but also about life and responsibility. For the first time, many students are making key decisions about their lives, class schedules, time best spent, and where to spend their money. Back at home, the students’ parents are primarily worrying about their kids’ grades and overall performance, but they also are concerned with how their kids are handling newly learned financial responsibilities.
Generally speaking, both students and parents realize the importance of building good financial habits, but students still grapple with handling money smartly, which requires the need to establish some control without jeopardizing independence. This notion has led to the increased use of prepaid cards on high school and college campuses all across the country. Here are six reasons why these cards benefit students of all types.
- Prepaid cards make it easy to establish an effective level of control over spending. Just by its nature, a prepaid card has a built-in spending limit because the amount of money available is pre-determined. Once that limit is reached, further spending is prevented until additional funds are deposited onto the card.
- However, along with control comes a degree of independence. Students and parents can agree on an appropriate amount of money to be loaded on the card at an agreed-upon frequency such as weekly or monthly. From that point on, the student determines how the funds on the card are spent. Tracking spending is easy to help identify where and how money was spent.
- The card is convenient and easy to use. An added benefit is that it fits easily into the student lifestyle. College life is fast-paced, and no student wants to be burdened with a checkbook or repeated trips to an ATM or bank branch. The fact that the prepaid card enhances mobility is a definite plus for students. The card can be used for purchases both on campus and off, and also doubles as a form of student ID, especially when personalized with a picture. Even student loan payments can be made with the card, just as student loan allotments can be loaded onto the card.
- With the rise of popularity of prepaid cards, many universities are working with local businesses to forge new merchant rewards programs. This means that businesses on or near the campus express a strong desire to have students spend their money locally. In return, these merchants are offering rewards to students in the form of discounts, free merchandise or other rewards.
- Using a prepaid card helps build good money habits. Over time, it helps teach students how to budget their money. It also prepares them for using other financial tools and gets them used to dealing with a payment card. After all, checks and checkbooks are now relics of another time, and even carrying cash is not as popular as it once was.
- A prepaid card provides a safe and secure way for students to handle their money. The cards are safer than credit cards because there is negligible risk of spending over the pre-loaded limit. Even if stolen, the cards are easily replaced and the existing deposited funds are protected. A prepaid card also protects the student’s credit rating.
With all these benefits, it’s easy to see that a prepaid card is the ideal way for students and their parents to rest easy when it comes to handling money and controlling spending.
As for prepaid cards, their mobility, flexibility, security and ease of use make them the ultimate financial solution for students. In addition, they provide an excellent way for students to learn effective spending and budgeting habits – habits that will serve them well in college and beyond.