American Express Pass Card for Teens

The American Express Pass Card for teens might be just the solution you are looking for.

Times are changing.

In the olden days teenagers could just pay cash for whatever they needed.

But these days everything is online.

“Mom – can you get me a song from iTunes?” or “Mom – I want to order a game (gadget, book, toy, insert just about anything) from Amazon.”

So I use my credit card – and they pay me the cash.

But pretty soon – my oldest, who is fifteen – will be out on his own.

And he will need a piece of plastic.

I didn’t like the idea of a true credit card for teens which I would have to co-sign for – it offered too much freedom.

And I didn’t like a debit card for teens either. I’ve heard stories that they are more susceptible to fraud, and since they are tied to your checking account … well let’s just say that it is not a good scenario. On top of that, I have heard that some banks charge huge fees if you over draw (why they even allow this to happen – I don’t know – isn’t the point of a debit card to avoid overage and owing credit?)

So I started searching around and came across the American Express Pass Card for Teens. It falls into the category of a prepaid credit card – but according to the website it is neither a debit or a credit card.

Basically the card is free (unless you add your child’s picture on the front for a charge of $9.95 – which is recommended for security).

Then you or your child can transfer money onto it either by transferring directly from your bank account, by transferring funds from a parent’s Amex card, or by purchasing a MoneyPak card (found wherever gift cards are sold).

Both you and your child can log in separately to the same account – so you can keep tabs on what he is buying.

When the balance runs down to zero, the card will be declined until more funds are added – and there are no overage charges.

Your child can also make one free ATM withdrawal per month and any additional withdrawals carry a $2.00 fee.

The American Express Pass card for teens is available to kids ages 13 and up.

A Good Teaching Tool

This seems to be a great way to teach kids about credit.

Here are a few scenarios that come to mind:

• Set up a regular bank account for your child. Have him deposit his allowance or earnings (babysitting, mowing the lawn, washing the car) into this account. Once a month have him transfer a part of this onto the card for “spending money”. Every time he wants something that is not a necessity have him use his card. If he wants to make a big purchase – then let him wait a few months until the balance on his card is large enough to cover the purchase. See the magic? He cannot buy it now and pay for it later. He must actually have the money first.

• An alternative way to handle this is for the parent to put the allowance directly onto the American Express Pass card for teens. I don’t like this scenario as much because it doesn’t teach kids how to save part of their earnings. But it is convenient and still teaches them not to spend more money than what they actually have.

A more indirect lesson that they will  learn is how to keep their card safe. They can’t leave it lying around, they can’t stuff it in their sports bag, they must have the card with them at all times or just leave it at home.

Overall I don’t really see a downside to the American Express Pass Card for teens, especially when compared to traditional debit cards and credit cards.

Has your family given this a try? How is it working so far?