6 Ways To Guard Your Kid's Prepaid Card

There’s a critical money lesson many parents overlook. It’s one of the very first lessons every card-toting child should learn: how to protect their money. Sadly, kids need to know that where there’s money, there’s fraud risk. And FamZoo cards are no exception.

First, let kids know that cards can be compromised in numerous ways. Here are some classic ones starting with the most obvious:

• The physical card can be stolen outright.
• The numbers can be lifted by someone who briefly stumbles across the card.
• The numbers can be stolen by a dishonest merchant — either when used in a store or entered online or recited over the phone.
• The numbers can be stolen by a hidden card skimmer mounted on a physical point of sale device.
• The numbers can be stolen by a hacker who has cracked into a merchant’s system or stolen a point of sale device.
• The numbers can be guessed by an automated fraud bot.

The bottom line: You can never fully eliminate fraud risk. But, you can certainly reduce it.

Here are six suggestions to help your kids guard their cards:

1. Keep card numbers secret. Coach kids to only share card numbers and security codes with a trusted merchant by dipping or swiping the card at a point of sale device, typing the numbers into a secure form, or — in rare cases — reciting them verbally. Don’t leave cards in plain sight. Never put full card numbers in an email. Never share a picture of a card (front or back) on social media.
2. Don’t lend to friends. Coach kids to never enter their cards into a friend’s (or sibling’s) app or site. We’ve heard of cases where one-time favors for friends on Uber or Lyft turned into a series of future “free” rides.
3. Pick a good PIN. New cards and replacement cards come with a default PIN. If you don’t update it or if you pick an obvious value, anyone who finds your card might figure it out. Then they could liquidate the balance at an ATM or cash-back register. Teach your kids this trick for picking a secure PIN that is easily remembered.
4. Activate alerts. With activity alerts enabled, you’ll know immediately when someone attempts an unauthorized purchase.
5. Lock when in doubt. If you see anything suspicious or unexpected, lock the card right away until you’ve had a chance to investigate.
6. Password protect. Coach your kids to have secure passwords for their phones as well as their e-commerce apps and sites. For example, apparently unscrupulous “friends” can use your email address and an easily guessed password to sign into your Chipotle app — a burrito fiesta on your nickel! No bueno.

If you do ever see an unauthorized charge despite your best defensive efforts, see here.