6 great money tools for your kids

Facecard's prepaid MasterCard: This card was inspired by social media and texting. A teen can check the balance via text message and manage the account on Facebook. Parents can also select a couple of neat built-in security features: They can prohibit the card from being used at specific kinds of businesses and can sign up to receive an e-mail or text message whenever the card is used and see where the card was used as well as how much was spent.

Payjr: Payjr offers two versions of prepaid cards: one for kids 12 and younger, the other for teens. With Payjr's Chore and Allowance System for younger kids, a parent sets up in advance a list of chores with the amount a child will earn after completing each one. The list is e-mailed to the child, and as each task is finished, the child goes online to check the task off the list. The parent receives an e-mail with the update and approves the payment, which is transferred into the child's account. Also, Payjr's Visa Buxx card for teens allows parent and child to view balances and purchases and transfer money from a bank account. Both teens and parents can receive e-mail or text messages every time the card is used for purchase details and balance notifications.

Don't forget to read the fine print

In the end, whether you're checking out an online prepaid card for your teen or your child tells you about a great new site, it pays to read the fine print.

The language can be sneaky. For example, the headlines in an ad may blare that there's no annual fee, but a deeper read of the slim disclosure sheet that arrives with a new card may reveal a whole slew of fees written in microscopic type. There, you'll discover that you'll pay a couple of bucks whenever a card is reloaded or when your kid makes an ATM withdrawal. In addition, the number of ATM transactions may be limited to a couple per month or -- guess what? -- more fees.

Fine print matters when it comes to financial statements, as well. Lori Mackey, the founder of Prosperity4Kids, a company that produces financial education books and CDs for kids, says the best tool parents can use is to be completely transparent with kids about finances. "Sit down and read the credit card statements, the terms and conditions and list of bank fees together," she says. "Kids are savvier when they know what is going on. If they know what the extra fees will be in advance and realize they're coming out of their pocket, they'll be more likely to manage their money in order to avoid them."

• Can you cure your kids' 'gimmes'?

This article was reported by Lisa Rogak for CreditCards.com.

Published July 16, 2009

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