Before I get into some ways for our teenagers to manage their money via credit or prepaid cards, I want to note that there are some great websites that sell gift cards. Gift cards and points have become a separate currency, if you will, like bitcoin.

Websites like Raise or Cardbear resell gift cards. These are all legitimate cards that can be purchased at a discount and used right away. Let’s say you get a $100 gift card to go ballroom dancing and there is no way you would ever go ballroom dancing. Cardbear will purchase or allow you to sell the cards. On Raise you will see different prices like seven percent off a card, that one can use for an immediate purchase. Most major store websites and many other online purchasing sites can be found on Raise and Cardbear.

Where I have found this to be useful: Let’s say you are about to go to a movie, buy something on Amazon or pay a bill like Netflix. Before you do so, go to Raise or Cardbear. Purchase the gift cards for the amount you need and you will save 7 percent right away. It’s not a lot of money but in today’s world every dollar counts.

A reader asked the following:

I am looking at some better ways to give cash to my teenage daughter for allowance and lunch money. I don’t think she’s old enough for a credit card, especially since we’ve already had to deal with an identity theft issue once last year. Do you have any good advice on a simple way to give her money without having to go take out cash all the time?

A.R.

Dear A.R.,

Thank you for your question. There are some really interesting ways to teach our children about the responsibility of earning and spending money. It is also very important to teach our children the pitfalls of bad spending habits.

When I was a teenager we earned money by babysitting, raking leaves, shoveling snow or being waiters. Payment was made in cash back then. We would have some way of saving the money: in an old book, a piggy bank, a strong box or just under the mattress. The money always called to me to spend it right away. Luckily, at my bar mitzvah, my mother insisted on opening a bank account, and gave me a passbook (ask your kids if they’ve ever heard of a passbook). This was the only way I was ever able to hold on to what I’d earned, because it wasn’t easily accessible all the time.

Today things have changed, with the introduction of mobile payment. There are a few options we now have to allow us to give our kids cash on the go, while at the same time, limiting their ability to spend without stopping.

First off, one can go to a store and buy a prepaid gift card. Pick the ones that can be replenished by the store of purchase or that give you an online option. These cards have one or two drawbacks. If the user goes to a restaurant, a little secret is that the restaurant will pre-charge slightly more than the bill, to make sure that they can add a tip later. Thus, if their card only has $20 on it, and their bill is $19, they might still get declined. That is a situation we definitely don’t want our kids in. Also, these cards have an initial cost of between $3-$6. This isn’t terrible if your child is good at holding onto them, but you don’t want to constantly have to buy new ones.

I think the best option in this regard is PayPal. I am a huge fan of this Israel-based company. They’ve been around a long time, have amazing support and have pretty much revolutionized online payment systems. Plus, if you have a problem with a charge, you can dispute it by phone or online. There isn’t a minimum for PayPal though there is a minimum age requirement.

Now, if your child is enterprising and likes to earn his or her own money (or you’d like to teach them the value of a dollar and get them working early), there are new, high-tech ways for them to get paid. PayPal is one of the safest ways of transferring money today. Their services in this capacity have been met by startups like Square.

If your child has a snow-shoveling, lawn-mowing or babysitting business, they can offer to accept payments via PayPal or Square. There are also several other similar services.

Each service has different benefits. PayPal, being the most established, is like having a bank account. However, they can accept money transfers via email or their mobile app. Many banks now actually use PayPal’s platform for their mobile payment options.

Square and other similar services allow you to go to a local store like Target or 7-Eleven and purchase a Square card reader. This is a small device that fits into the headphone jack of your phone or tablet and syncs with the Square apps so you can accept credit card and debit card payments. How cool would it be for your child to offer their babysitting or lawn-mowing jobs the option to pay with a card? The only challenge with this is that, like other Merchant Service Providers (MSPs), Square takes a small cut of every payment. This cut matters more if you are only charging $15 or $20.

I know some parents want to give their teenagers what they never had, but when I talk to my friends about this, I always think of a commercial for credit repair I once saw. It shows a parent who gave their college-age child a standard credit card. The boy then charges books, food and an all-expense-paid vacation on the card. It’s a little dramatic, but I think it showed the point. Without proper guidance, our children don’t have a good idea of how to spend and save.

By Shneur Garb

 Shneur Garb is the CEO of The Garb I.T. Consulting Group and STEM-Makers.com. Comments or questions can be emailed to [email protected].