My boy is less than 4 months old, but if he was a different gender and maybe 13-14 years old, I’d be very concerned. There are no shortage of reasons that would make me want to Rapunzel her until she’s at least 28. (Yes, I’m talking about you Sexy Baby documentary.) Perhaps it would be wise to get into the tower building business.
And then there is Justin Bieber. He might actually be more popular than Jesus especially with that teenage female demographic.
Combine that popularity with a prepaid debit card with tons of fees and parents have a potential problem. Yes, Justin Bieber is going to offer his own “SpentSmart” prepaid card through BillMyParents.com. My wife jokes that she’s going to tell Little Man to go to IGotAJobToPayForIt.com or ICollectedCansAndSavedForIt.com when he gets older. She’s not really joking though as “Bill My Parents” is just not going to fly here.
The card appears to be anything but “SpendSmart.” Here’s a list of the fees (rounding up the nickels):
- $3.95 monthly fee to have the card… which is around $50 a year. If you are loading $1000 on the card, and I think that’s extremely generous to give a kid that’s a ~5% annual fee
- Loading charges of ~$3 from a credit or debit card and $0.75 from a checking or savings account. This discourages loading the card often with money, but that’s exactly what you’d want to do with a teen so that they don’t have access to $1000 at one time.
- Lost card replacement fee of ~$8. I don’t know if I was a typical teenager, but I lost things fairly often, so I could see this adding up.
- ATM charge of $1.50 to withdra the money, and 50 cents for a balance inquiry. So the card costs me money to carry with the annual fee, money to see how much I have there (at least at ATMs) and money to access the money (at ATMs). I’m sure this doesn’t cover the fees of the company that owns the ATM itself, so that’s a double hit.
- An inactivity fee of $3 if the card isn’t used for 90 days. So even if I’m paying to carry the card, if I don’t use it, there’s a fee.
If you were going to get this card for your teenager and put $1000 total throughout the year in small regular increments, I could see it adding up to about $75 in fees or about 7.5%. If that sounds terrible, you’ve got a keen ear.
In BillMyParents.com’s defense they seem to build some good technology into the card that could actually help parents keep track of their child’s spending. Also, let’s be honest, Justin Bieber’s branding isn’t going to come cheap either.
I didn’t like Suze Orman’s pre-paid debit card. Few liked the Kardasian Kard with fees so high it was canceled due to consumer backlash. Even though some view the Beiber card as a “middle of the road” option for the pre-paid industry (see Lauren Saunders quote on the 3rd page of this Washington Post article), I don’t like it any better.
I don’t like the intentional mixing of emotion (Bieber) with high fees. I won’t even a get a Red Sox credit card, because their rewards are simply not competitive with other credit cards.
The Biz of Life says
Anyone who listens to Justin Bieber pretty much gets what they deserve…… I don’t think giving kids a credit card of any kind teaches them to be responsible with money….. in fact, it probably teaches them the opposite. Cash works best with my kids, especially cash they’ve earned themselves.
Lazy Man says
Well, there’s no credit here, it’s a pre-paid debit card, so you can think of it working a lot like cash.
I think at some point you have to teach kids about credit and probably the earlier the better. If not, it’s a bad life lesson to learn the hard way. I’d get Little Man on learning credit now, but he hasn’t even mastered trigonometry yet and behind my expectations for a 3-month old ;-).
There is no fee for ACH transfers and most cards charge an ATM fee if used at another bank’s ATM / commercial ATM. The balance inquiry can be avoided buy checking the balance online or with a smart phone. The alerts for each transaction and ability to place the card on hold, and then active again without a fee and quickly is a unique feature.
Lazy Man says
Yes, most banks charge a fee if used another banks ATM. If a bank doesn’t have ATMs, like USAA, they tend to reimburse those fees. I haven’t seen any Justin Bieber ATM machines, so I would expect them to at a minimum not charge a fee themselves on top of the fee the other bank is charging for using the ATM. That’s double charges when there reasonably should only be 1, and could be zero (as in USAA).
I mentioned that the card has some features that could be useful to parents. However, if you think you might have to place a card on hold and then activate again, I would argue that you probably shouldn’t get the card in the first place.