Underage spending

A new prepaid Visa card for under-18s has been launched, but teenagers may fall for some hidden fee traps.
 
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01.MySpace prepaid Visa card

Teenagers as young as 13 can now sign up for a prepaid Visa card without any prior financial education or parental consent.

 

Any MySpace user can apply for a MySpace Recharge card. To sign up for MySpace, all you need to provide is an email address, your name, gender and birthday; the minimum age is 13. According to the Nielsen Online Consumer Generated Media Report 2008-09, MySpace is the most popular social networking site for under-18s.

 

“The MySpace Recharge prepaid Visa card is unique in that it allows under-18s and people who don’t own a credit card the freedom and security to spend their own money on items such as concert tickets and clothes, at millions of online and retail stores worldwide,” says Nick Love, MySpace Business Development Director Australia.

 

The MySpace Recharge has a 20-page Product Disclosure Statement (PDS) that lists all the possible fees and charges for the card. However, CHOICE is concerned the language used in the PDS does not take into consideration some of the card’s target users – those who are under 18. Teenagers could potentially sign up for MySpace Recharge without a proper understanding of the fees involved, unnecessarily costing them more than to use cash or their parents’ credit card instead.

 

Fees for MySpace Recharge include a one-off card issue fee of $5.95, ATM fee of 75c per transaction and a card closure fee of $15. A maximum credit of $1000 is allowed and is reloadable via BPAY and at two major retailers, which ANZ will soon be announcing.

 

In August, when MySpace and ANZ launched MySpace Recharge, ANZ received 2000 applications within 48 hours. In December 2008, more than 1.2 million school students and 547,000 tertiary students were on MySpace.


 

 
 

 

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