By Dawn Cranfield
Justin Bieber Promoting New Teen Debit Card
Justin Bieber is endorsing a new debit card geared towards teens from SpendSmart. The video commercials will begin airing in the next few days on YouTube and will feature Bieber offering advice to teens and families regarding finances.
The young crooner will be spewing wisdom such as, “You know when I was a kid, we didn’t have a lot of money, so me and my family had to watch the money that we spent. I learned if you have $100 or $100 million – if you spend more than you have, you’re going to go broke.” (nytimes.com)
Bieber goes on to advise fans to “have a talk with your family about money” and that “Managing your money is important. There’s a great company that can help you do that called SpendSmart.”
However, before you go rushing out to get your kids a parent sponsored debit card in which they drain the balance on a daily basis; make sure you do your due diligence by reading the fine print. SpendSmart’s fees include: monthly fees of $3.95; loading fees of $2.95 from a credit card, or $0.75
from a checking account; $1.50 for and ATM withdraw not including the ATM surcharges; $0.50 for ATM balance inquiries; $7.95 for lost card replacement; and $3.00 for 30 days of inactivity.
So, just to break it down, if your teen used the card for 12 months with an average of 2 ATM withdraws per month at an ATM that charged a surcharge of $2.00 each time, they checked their balance twice a month, and you loaded the card each month from your credit card (all conservative figures) the card would cost approximately:
- $47.40 for monthly fees
- $84.00 for ATM withdraws ($1.50 + $2.00 X 2 per month X 12)
- $12.00 for balance inquiries
- $35.40 to load the card
- Total for the card for the year = $178.80
Still, according to John Ulzheimer, president of consumer education at SmartCredit.com, he states the fees of SpendSmart’s debit card were lower than those for many other prepaid cards. But, he went on to add, “But that’s like saying my broken arm is not as bad as your broken arm because it is comparing two bad things and trying to say that one is actually better.
One of the features SpendSmart touts as a way to lure in technologically connected consumers is the ease with which parents can monitor their kids’ spending habits. Parents can receive text and email alerts then opt to have the account suspended if they see something troubling.
However, many banks offer the same technology with a cheaper solution than a prepaid debit card. Wells Fargo has a Teen Checking Account and Chase offers a High School Checking Account where the parents are co-owners of the account, just to name two. There are credit unions and local banks interested in helping parents work with children as young as 13 learn fiscal responsibility.
The best thing parents can do for themselves and their child is to research available products, select the one that will work the best for them, and teach their child how to balance their budget, their checkbook, and how to live within their means.
It may be tempting to use a prepaid debit card because it is endorsed by a favorite celebrity, but when the star du jour is being paid $3.75 million and will not be the person refilling the card or paying the fees, think smart and do the math.
Look for the video to begin airing next Thursday on Justin Bieber’s YouTube channel.