A recent survey conducted by Barclay’s bank for their new Money Skills initiative has concluded that 36% of young adults regularly run out of money. This is combined with the finding that three quarters of those under the age of 24 still rely on friends and family for financial support and advice.*
It’s possible that prepaid card could actually help 18-24 year olds learn better money management skills, by enabling better budgeting, easily managing and paying bills and avoiding interest charges on purchases.
For young adults, the lure of credit cards can seem quite tempting. The worrying statistic from the Barclay’s Money Skills initiative that 1 in 3 young adults believe that spending on a credit card isn’t actually spending money corroborates this. However, a prepaid card is preloaded with money before it can be spent and doesn’t offer a line of credit. Therefore, in using a prepaid card, young adults can spend without borrowing and be safe in the knowledge that purchases won’t accrue interest charges. Also, when the funds have been spent, more money can be simply loaded onto the card account.
With this approach to spending, young adults could be encouraged to monitor their spending more effectively and independently of friends and family. By preloading money onto a card account, such as the Cashplus prepaid Gold MasterCard®, spending can be managed more easily as money has to be preloaded not borrowed. Furthermore, with a Cashplus card customers can review their transaction history online and also receive free text balance update alerts direct to their mobile phone, allowing customers to easily monitor their spending habits.
For those younger teens who still live at home, a Cashplus account can be opened by a parent or guardian and the teen then added onto the account. Up to 4 additional cards can be added to a single Cashplus card account, so as long as the teenager is 13 or over, they can have their own card attached to their parent’s account. In this way, parents can begin teaching money management skills from a young age, and closely supervise how much is loaded, and consequently how much is spent. The ability to have up to 4 additional cards on one Cashplus account could also be beneficial for those young adults living in house shares. As a result, bills, payments and household expenses can be easily shared and managed.
Funds can be added to a Cashplus account in a variety of ways, including via cash at over 1000 retail stores, epay outlets, and UK Post Office® branches or via bank transfer. If Cashplus receive a top up via bank transfer from a bank that uses the Faster Payments service before 15:30, the money will credit the Cashplus card account that same day. For those young adults that have their own card account they can even have their wages deposited directly onto their Cashplus card by an employer.
In having these plentiful and simple ways of topping up a Cashplus card, 18-24 year olds can arrange for the payment and management of bills and online services and then have limited reasons to miss regular payments. A Cashplus card account can be used to manage subscription payments and also set up free automatic bill payments. This could be especially useful for services such as online gaming, music downloads and also for grabbing online shopping bargains. As with other prepaid cards, the Cashplus card comes with guaranteed approval and no credit checks. This is ideal for young adults who may have a limited credit history and who may struggle to apply for other card payment methods.
Therefore, prepaid cards present a viable way in which young adults can learn good money management skills. From better budgeting to responsible spending and bill management, prepaid cards could offer a solution to the alarming rate of money mismanagement among 18-24 year olds. The Cashplus prepaid Gold MasterCard offers a host of benefits that can aid in this, which could mean that young adults will end up with more money and less excuses when it comes to their finances.
* http://group.barclays.com/Media-Centre/Barclays-news/NewsArticle/1231786509535.html
