If you know much about credit cards and students then you are probably aware of the fact that many college students get into a huge amount of credit card debt during the first few years that they are away at school. The credit card companies have been held at least partially to blame due in no small part to the fact that they aggressively marketed their card products to students on campus across the nation even though students dont necessarily have the financial experience necessary to make wise choices with credit card use. As a result of this problem, many college campuses have tried to reduce the amount of on-campus marketing that takes place from credit card companies. But there is one type of credit card that seems to be slipping by and making its way to kiosks on campus: prepaid debit cards.
The prepaid debit card is a card that works essentially like a debit card. The only difference is that you have to establish a separate account for this type of debit card rather than just using your own checking account. You put money into the debit account and then you can access that money using the prepaid debit card. The idea is that it gives you the convenience of a credit card without the risks of debt and problems that college students are notorious for getting in to with their first credit cards. But these prepaid debit cards come with drawbacks and students should weight benefits to these cards carefully and if they could just use a standard debit card for their purchases instead.
There are several drawbacks to the prepaid debit card. The biggest drawback to this type of credit card is that it typically has a lot of fees associated with it. Although there is no interest rate charge, there are certain transaction (and lack of transaction activity) fees in addition to fees associated with opening up the account in the first place. So you dont actually eliminate the major problems that are associated with atypical student credit card debt. You also fail to get the benefits ofa standard credit card which includes consumer protection on purchases and stolen cards as well as the fact that responsible credit card use would allow you to establish a positive credit history which isnt going to be the case with prepaid debit cards.
Its certainly true that college students have to be careful about getting in to problems with credit card debt since its such a widespread problem, affecting a large percentage of the student population. And it may even be true that campuses should take some responsibility for making sure that college students are protected from predatory lenders and educated about the proper use of credit cards. But ultimately its really up to the student to make sure that he or she understands how to use the cards properly. Otherwise the student runs the risk of finding a new type of offer that ends up being just as bad or worse as the original credit card.