Your teenage daughter may love Justin Bieber, but is his new prepaid debit card for teens a good financial move? The entertainment business is changing and artists like Bieber are tapping into new sources of income. Product endorsements, such as the one Bieber struck with SpendSmart (a prepaid debit card marketed to teens), are becoming more and more commonplace.
Celebrity endorsed credit cards are not new. In recent years, Usher as well as the Kardashians have had their own branded credit cards, but both were unsuccessful. The SpendSmart site will feature a series of videos from Bieber offering advice on financial management and budgeting. Bieber was reportedly paid $3.75 million in the deal and has the chance to make even more based on the growth of the card.
The idea behind the SpendSmart card is to use it as a money management training tool for your teenagers. Many of the reviews I have read about the card have been scathing. Much of the criticism has been of the fees, but after reviewing them they appear to be right in line with those of other prepaid debit cards. If you are a regular reader, you likely saw my recent favorable article on prepaid debit cards. One of the reasons that adults are flocking to prepaid debit cards is to avoid bank fees, which can be many times more egregious. The trend of ditching a checking account and using a prepaid debit card has become a huge trend among adults, so I see no problem with introducing a concept like this to teens.
Cool Features That May Just Make "U Smile"
Parents receive instant text notifications each time the card is used and they can lock, unlock, and send money to the card with a text message. Both teen and parent have the ability to view the balance online or with a smartphone app. Blocks can be placed on the card so it can't be used at inappropriate merchants (such as a liquor store). Also, there is never a risk of overdraft fees. Maybe the coolest feature is the ability to set up an allowance that is automatically drafted from the parent's account and deposited to the teen's card. Also, since it is a prepaid card, there is no credit check required for parent or teen.
While researching this article I had preliminarily thought I would do a side by side comparison of this card and its fees against Wal-Mart's Bluebird and others, but after seeing all of these special features that did not make sense. While you might find arguably better terms with some debit cards, they won't offer you all of the parental controls of the Bieber endorsed card. As a result, I think it would be comparing apples to oranges to attempt any such comparison.
Overview Of The Fees -
Cost to get the card - Free
$3.95 monthly to keep the card active
$3.00 if the card remains inactive for 90 days
$1.50 for withdrawals at ATMs
I love the idea, the fees are comparable to those of other debit cards, and the parental controls are ingenious. This card may not only make sense for your teens living at home, but even more so for those living away at college.
Helping you make the most of God’s money!