It may not seem to be the most obvious thing to give as a birthday present, but a credit card is becoming a more popular choice. Credit cards can be a very good gift, but it has to be done carefully.
Credit cards are most often given to young adults who would not otherwise have a card. They are mostly given as prepaid cards.
A prepaid credit card is a credit card with no credit facility. Instead it has a certain amount of money that is on it already. Some prepaid credit cards can be topped up when the money is spent, and some credit cards are totally closed in that when the money is spent they will not be able to be topped up. The prepaid credit card will have the card holder’s name on it, and for many people it may be the first time that they see their name on a credit card.
Prepaid credit cards use the credit card payment system, which means that they can use the payment system to pay for the goods that they wish to use at a store through production of a credit card. It is far safer than carrying a large amount of cash. It can also mean that goods can be purchased over the internet. Prepaid credit cards are not subject to credit checks, this means that young people who would not be able to use many credit cards can use these cards.
Prepaid cards are covered by zero liability guarantees. These are a guarantee that a credit card will not have a credit card transaction charged to their account as long as there is no cooperation such as giving the card to another person and that the person tells the card issuing company as soon as possible that the credit card has been misused. Prepaid credit cards will get statements that are sent to the card holder, and it is a good idea to encourage them to read the statement even if they already think they know what they card has been used for.
Although buying a prepaid credit card may seem natural for a child or young adult that the present giver no longer knows that well, it is a good idea to make sure that the parents are asked before doing this. Parents may not think that a person is ready for this, or may think that this is a good time to start learning about credit cards in a relatively controlled environment.
