10 Mistakes Kids Make With Prepaid Cards

Ow! Hot!

Sometimes kids just have to learn what not to do the hard way. Think of it as touching the financial hot stove. Better a minor burn now than going down in flames later.

Here are 10 typical mistakes kids make with cards:

1. Making regrettable purchases. Every kid does it. As my own son said in his reflections on using FamZoo: “That pair of Heelys roller shoes is undoubtedly my most recognizable purchase, not only because it drained all my funds in one fell swoop, but because it was simply a dumb and impulsive act of squander. Sure, they were enjoyable for a little while, but it was a foolish purchase in the long run considering the cost.”

   So what do you do if you see your kid gearing up to buy something obviously poorly made, faddish, or just plain dumb?

   I say, let’em do it. A bad purchase can be a great teacher.

2. Getting suckered into subscriptions. We see this constantly. Amazon Prime and Doordash are two common culprits. Kids get snookered into ticking a box at checkout that kicks off a recurring subscription.

   Want free, fast shipping? Why, yes I do! Check. Oops. Here come the “mystery” charges.

   When this happens, help your child contact the merchant to cancel the subscription. Often, they’ll even provide a refund. It never hurts to ask.

3. Sharing cards with friends. A typical scenario is a kid entering the card on a friend’s Playstation, XBox, Doordash app, Chipotle app, etc. At the time, the kid is thinking it’s going to be a one-time purchase. No harm. No foul. But once the card is stored as the friend’s payment method, it’s the gift that keeps on giving.

   These cases can be hard for parents to track down, because the card is entered in someone else’s app or service. Pro tip: locate the first transaction for the merchant in the Transaction history page. Click on the green settled box to get detailed time of day info. That will often help jog your child’s memory about who they were with and when they added the card to the friend’s app or service.

4. Coughing up card numbers at sketchy sites. The Internet is rife with dubious sites pulling scams on the unsuspecting and the vulnerable. Make sure you turn on activity alerts for your kid’s card, so you’ll know right away when it has been used somewhere unexpected. If you believe a sketchy site has your child’s card info, lock the card and order a replacement.
5. Sending money to sketchy people. We’ll often see this on social media or in gaming communities. “Send a payment to @ImaFraudster and I’ll send you a name-your-favorite-bright-shiny-object.” Payment sent. Poof! Ghosted. No bright, shiny object delivered. It’s a tough, but important lesson. Only transact through reputable merchants and platforms.
6. Posting pictures of cards. Kids forget that cards have sensitive numbers on them. Posting card pics on social media is a no-no. Be sure to review the 11 numbers kids with cards need to know and how to keep them safe.
7. Picking bad PINs. Choosing an obvious PIN or leaving it at the default setting makes a card vulnerable. Review this tip for picking a secure, memorable PIN.
8. Entering incorrect PINs. Repeatedly. Kids need to know it’s three strikes and you’re out when entering incorrect PINs. After the third whiff, the card will be automatically blocked as a protection against fraudulent use. Subsequent purchase attempts will decline. If that happens, contact us to reset the PIN and lift the security block.
9. Entering incorrect addresses, security codes, or expiration dates. As adults, we often forget how many little details go into making a successful purchase. Declines can be very embarrassing and intimidating for young card users. I recommend reviewing all the different ways a card can fail with your young cardholder ahead of time.
10. Losing cards. Oh, the dog-ate-my-card stories we’ve heard over the decade — sometimes quite literally! 🐶 Tell your kid to notify you right away if a card goes missing, so you can lock the card before it gets drained. If losing cards becomes a habit, consider a parent-assessed replacement penalty. A little skin in the game does wonders.

Embrace the inevitable mistakes.

Few things focus the young mind more than economic loss or the embarrassment of a declined purchase. Fortunately, you can spare your kid the parental lecture. Let experience do the talking. Just empathize.

For once, you get to be the good cop.

Cool.