<p>I recently noticed the full service reloadable prepaid "Serve card from AmEx. It looks like it might be a convenient, accountable, restrained way for a kid to handle incidental expenses, when compared to cash or a real credit card. It might give a kid practice with sound credit card management techniques before actually having credit. Any experiences or feedback out there?</p>
<p>What about all the places that don’t take American Express?
Would the transaction go through more like a debit card?</p>
<p>We just got a joint credit card with our kids with a fairly low credit limit–about $3000. They have been very respoinsbie with it and chose Visa, which is widely accepted everywhere they’ve needed or wanted to use it.</p>
<p>Both of our kids have an Amex card linked to our account. They don’t use it without prior authorization from us, but it allows them to make purchases we would ordinarily pay for when we are not present to do so. </p>
<p>Is the “Serve” card a replacement for the PASS card? I hated that PASS card. Took 5 to 6 days for funds to clear and the call center was in India and you could never hear what they were saying to you. The feature where the parent could be notified of purchases never worked and the website to reload was a nightmare. We cancelled it and just got a credit card linked to our everyday checking at Wells. I love AMEX but PASS for teenagers was the worst product they ever put out there.</p>
<p>Another option is to open an account at an internet bank - ally, capitalone360, etc. - and get a debit card. The account can even be in the kid’s name. You can put some money in when needed but there are no minimums. I thought of this because they’ve opened a few 360Cafes (a “bank” plus Peet’s Coffee, meaning a kiosk in a coffee shop) and opened an account because they gave me $75 for using the debit card 3x. I keep a few hundred dollars in it. </p>
<p>One note about Internet banks like Ally and debit cards…</p>
<p>“Federal law limits the number of withdrawals and transfers you may make from your Money Market Account during each statement cycle. You can make up to six withdrawal transactions – including electronic fund transfers and telephone transfers, checks, and debit card purchases – per statement cycle. Each transfer or payment from your Money Market Account is counted as one of the six limited transfers. You will be charged a $10 fee for each transaction that exceeds this limit. Fortunately, ATM withdrawals are unlimited.”</p>
<p>Goskid learned about this the hard way…</p>
<p>You get more protections (like free extended warranty and ability to dispute) when you pay by CC. It can also help your kid have great credit score, if your kid gets to share your (presumably good) credit score. That’s one of the reasons our kids have great credit scores, even tho D has no job yet. </p>
<p>D applied for and got a Costco AmEx CC in her own name, even tho she was a student and had no job. It has a credit limit that far exceeds her normal monthly spending; she pays off her balance in full each month. </p>
<p>S has also always been very responsible with credit and loves getting great signing bonuses, which he uses for free $$$ and/or travel. ;). S also pays off balance in full each month. </p>
<p>Our house is not looking for a credit card at this time. Yes, AmEx “Pass” was a pain, as I recall from years ago. But maybe they’ve improved the product and reintroduced it as “Serve”, which is why I’m wondering about people’s experiences. </p>
<p>For our purposes, at this stage of the game, it’s OK if it’s not accepted everywhere. We don’t need the better recourse with a true credit card, as it would just be for things like lunch, coffee, gas. I’d like to be able to review a historic list of expenditures together with the kid, online (which we cannot do with cash) so that the kid begins to internalize the realization that when you get something by swiping a magnetic card, it’s not the same as free. (And to learn this before there’s actual credit associated with it.) Essentially, I think a prepaid card with a user-friendly website could be a tool to aid with learning how to keep oneself on budget for small daily incidentals, and a bridge to responsible use of an actual credit card. Restrictions, such as the legal limitation on monthly money market withdrawals mentioned above, could make it unsuitable for the purpose I have in mind. </p>
<p>One of our local banks offers a gift card that works pretty much the same way, but it’s not reloadable, so if you wanted to keep the prepaid dollar amount low, (like two weeks’ worth of incidental money), you would have to keep running back to the teller to buy new ones.</p>
<p>Would a debit card work, that has no overdraft but just stops working when it gets down to zero? Schwab has one that has no ATM fees and is a VISA, so it’s widely accepted. Just a thought. You can put as much or little as you choose, at whatever time periods work for you. </p>
<p>^That is how our kids started out - when they were 16 they got a checking account linked to mine with a debit card that they used to pay their expenses such as gas and meals out with friends. I could add money to it if needed, and see all their transactions online. I never use a debit card, but it worked well for them.</p>
<p>I will check out the Schwab offering, and look at the details of the AmEx, I guess. I do want something fee-free. The bank gets to hold the money, and then dings the retailer; that should be enough! Thanks for the suggestions.</p>
<p>Correction–Schwab REFUNDS your ATM fees–whether incurred in the US or abroad, which is nice. We got it refunded when we used it in Canada–$3.99 Canadian per transaction!</p>
<p>Long story short – disappointed, once again (and very quickly) with the American Express prepaid product and the bureaucratic runaround from them over minor matters. We will be looking elsewhere.</p>
<p>The reviews I have read about this product were mostly VERY unhappy with awful customer service. </p>
<p>I’ve never dealt with prepaid cards, but the AmEx customer service issues surprise me because I have had great service with their credit cards.</p>
<p>Yes, I have also had great service with their CREDIT cards but read nearly unanimous horrid things about the pre-paid Serve cards. You can search online for the reviews. Personally, the warranty service for AmEx and their customer service has been better for us than their competitors. </p>