I suspect that this article from today's issue of The Wall Street Journal is not news to many of you. However, for those of you working with high school students (or college students) in either personal finance or a "traditional" economics course, this article is something you might want to hand out, even if it's just an "FYI".
Prepaid debit cards have been around for a while. But evidently the marketing is getting more aggressive. Parents and colleges have been complaining for a while about the way credit cards are marketed. (My position is that the bigger problem is that we don't spend enough time teaching students about credit. Credit is a tool. The problem usually lies in how it's used or misused. To borrow a quote I saw somewhere, "Lizzie Borden's axe was never on trial.")
Regardless, this instrument offers much of the convenience of credit cards. But it's a relatively expensive way to make transactions, and lacks some basic protections. As always in economics, it seems to be a case of "on the one hand, but on the other."
I think students and parents need to be informed about this payment option. What are your thoughts?
Virginia high school teachers may be interested in a Financial Education Summit sponsored by the Virginia Credit Union. The summit will take place on October 7 at Virginia Commonwealth University's Student Commons in Richmond. The program is free and interested teachers can find more information and register at the Virginia Credit Union website.