Prepaid may be the way forward for the young
In order to prevent the young from overspending, experts are expressing the need for teenagers to be educated on finances so that they learn the benefits of managing their money.
Due to the large number of consumers overspending on credit cards, experts believe it is important that teenagers are made aware of money management as early as possible.
compare credit cardsThis is because young people witness spending on credit cards as part of their daily lives when they are with their parents, and some believe this can encourage young people to fall into financial trouble later on in life.
Prepaid card expert, Danny Jatania, says it is crucial that young people are taught when and how their money is spent and are informed of the consequences should they exceed their budget.
He continued to acknowledge the increasing use of debit and credit cards for small transactions which makes education especially important for the young of today.
Mr Jatania said: "Young people are becoming much more accustomed to seeing credit and debit cards used for everyday purchases, so it's only appropriate that they are also fully educated on the implications that can mean in terms of debt, overdrafts and bank charges."
Mr Jatania believes children need to be made aware of these issues, not shielded from them, especially in the current climate.
"The answer isn't to shield [children] from such issues but to immerse them into full and proper tutelage on being responsible with and managing budgets and not to go overboard on luxuries they can't conceivably afford."
Some experts believe prepaid cards can help to teach young people how to manage their finances more effectively as they are provided with a pre-loaded budget that they are unable to exceed should they spend the overall initial amount.
Parents who wish to start educating their children about finances should look at different prepaid cards which can help children learn to manage their money independently.