Credit" card for Kids

18-05-2006 10:27

A new payment method, aimed at children and young people was launched this week, meaning that Kids no longer need the use of a real credit card to make purchases online.

The "Snap" card works in a similar way to pre-pay mobile phone cards where the user can charge the card with money at a pay point. Once the card is charged, users will be able to make purchases at any site displaying the Snap logo.

The card is completely free and to use one, all the user has to do is pick one up. Once funds have been paid into the account, the user will be able to spend the money online.

There’s no way of going into debt on the cards, or incurring any interest charges, because the user can only spend the money they’ve placed on the card. Money can even be transferred between cards through a mobile phone, so parents can top up the card for their Kids when they are away from home.

TeleGlobal, the company behind the cards, is the latest in a long line of companies to enter the pre-paid card market, with Mastercard already backing two twpes of card. The cards are extremely popular in the USA with the market thought to be work in excess of $2trn.

The company behind the cards, said they were aimed at children and people without bank accounts who may want to buy things online, but did not have the means to do so.

But earlier this year, the National Consumer Council expressed concern that the cards were a training ground for high lending, encouraging kids to spend money that wasn’t theirs if the cards were topped up by their parents.