Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

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bnes
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Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by bnes » Thu Oct 27, 2016 2:36 am

Is there a type of credit card that the holder can tightly manage, on behalf of an authorized user?
In this case the authorized user would be a dependent unable to manage her own affairs fully.
Access to a credit card is pretty much a requirement these days for work, life and even recreation.
Getting a card with a single fixed credit limit would not work well, as the individual needs to make occasional large legitimate purchases.

I have read https://www.nerdwallet.com/blog/credit- ... sible-use/
which supposes that features such as daily limits, monthly limits and single item limits are possible... but I've never seen any of that on any card I hold.

What would a protective/custodial credit card be called?
Last edited by bnes on Thu Oct 27, 2016 11:58 am, edited 1 time in total.

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celia
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by celia » Thu Oct 27, 2016 3:23 am

I'd probably call it a DEBIT card. Put some cash on it and when it's gone, it's gone. If it's lost or stolen, the balance will likely be spent by the person who finds it.
bnes wrote:Is there a type of credit card that the holder can tightly manage, on behalf of an authorized user?
In this case the authorized user would be a dependent unable to manage her own affairs fully, with a history of unchecked spending.
Access to a credit card is pretty much a requirement these days for work, life and even recreation.
Getting a card with a single fixed credit limit would not work well, as the individual needs to make occasional large legitimate purchases.
I disagree. A credit card is a convenience and is not required to live in our society. A person who is irresponsible with money is better off not having one. (You can't get into credit card debt if you don't have one.)

If she needs a credit card for travel for work, the employer should be providing it. Then the user will have to justify the charges to the employer, not you.

Fclevz
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Fclevz » Thu Oct 27, 2016 6:52 am

The 'family account' cards feature of the AMEX/Walmart Bluebird card seems like what you're looking for: https://www.bluebird.com

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Watty
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Watty » Thu Oct 27, 2016 8:08 am

bnes wrote: Access to a credit card is pretty much a requirement these days for work, life and even recreation.
I agree that there are times when having a credit card is important but getting into the habit of paying cash for almost everything also works well to improve their spending habits. Handing over a five dollar fill for a cup of coffee is a lat harder than swiping a credit card so they will likely spend less on things like that.

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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Spirit Rider » Thu Oct 27, 2016 8:56 am

AMEX allows you to set monthly purchase limits for authorized user's.

I don't remember who, but one other card issuer also has this feature.

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Doom&Gloom
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Doom&Gloom » Thu Oct 27, 2016 9:49 am

Spirit Rider wrote:AMEX allows you to set monthly purchase limits for authorized user's.

I don't remember who, but one other card issuer also has this feature.
AMEX does this fine. DS is an AU on my AMEX card. His card has a different #, limits can be set down to $200 IIRC, and alerts for various types of purchases can be set. It has worked quite well for us.

However, if he were "fiscally irresponsible" rather than "credit-usage inexperienced," I might have sought a different solution.

ww340
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by ww340 » Thu Oct 27, 2016 9:52 am

I use the Chase Liquid card for my son. I control how much money is put on the card, and I can instantly transfer money when needed. My son has been literally standing in a checkout line and I can transfer instant credit money to him via my phone, computer or iPad. It is the only card I know of that cannot be overdrawn.

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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Wagnerjb » Thu Oct 27, 2016 10:41 am

What I have done is to set up the alerts for the credit card so that I get an email every single time that a transaction is made over $10. If my son (a college student) has not already given me a "heads up" that he needs to buy something (that we both agree is appropriate), then I text him immediately asking for an explanation. I have told him that I will cancel the credit card if his spending is irresponsible.

I called the bank (Chase) to see if I could put a freeze on the account to "send a message" to my son - if I felt his spending was getting out of the bounds of our agreement. They said no, that I could only terminate the card, but not put a freeze on it. However, I think I could effectively put a freeze on the card by calling Chase and reporting a transaction as possible fraud. They would lock the account immediately and issue me a new card. Until I deliver the new card to my son, the card is effectively frozen from abuse.

Best wishes.
Andy

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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Spirit Rider » Thu Oct 27, 2016 11:07 am

Even though I mentioned AMEX's credit limit for AUs, I found a prepaid card a better option.

The credit limit resets every month and the balance does not rollover. The encourages what I like to call the "end of fiscal year", AKA "use it or lose it" syndrome.

Whereas, you can put a specified amount periodically on a prepaid card and unspent balances grow. This encourages them to learn to spend less over time when they want to make a bigger purchase.

Which kind of behavior do you want to encourage?

bnes
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by bnes » Thu Oct 27, 2016 11:53 am

A clarification from the op: This is not about credit vs. cash, but rather about offering a limited leash piece of plastic to the dependent. The balance will be paid every month. There's no employer involved. And there are an increasing number of card-only fiscal needs in life, most notably much of online shopping.

-------------------
Side note: I treat all my personal "credit" cards as debit instruments that happen to defer the cost, offer consumer protections, and pay rewards... it's a crazy system. I could just pay cash and be poorer.

Unfortunately true debit cards seem to come free of rewards post the Durbin Amendment:
http://thepointsguy.com/2015/06/rewards ... ards-gone/
But I'd rather have good management than 2% cash back.

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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by bnes » Thu Oct 27, 2016 11:59 am

ww340 wrote:I use the Chase Liquid card for my son. I control how much money is put on the card, and I can instantly transfer money when needed. My son has been literally standing in a checkout line and I can transfer instant credit money to him via my phone, computer or iPad. It is the only card I know of that cannot be overdrawn.
Excellent tip. With some cards the bank will overdraw and charge fees, which could just snowball badly.

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Elsebet
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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by Elsebet » Thu Oct 27, 2016 2:49 pm

My husband is an authorized user on my credit card (Costco Citibank VISA) and I have him set at a low monthly limit. He went through a phase where he was buying lots of junk from Amazon on the regular so I wanted something in place to prevent that happening again.

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Re: Setting up a Credit Card for a Fiscally Irresponsible Dependent: Managed Limited Card

Post by hudson » Fri Oct 28, 2016 5:08 am

ww340 wrote:I use the Chase Liquid card for my son. I control how much money is put on the card, and I can instantly transfer money when needed. My son has been literally standing in a checkout line and I can transfer instant credit money to him via my phone, computer or iPad. It is the only card I know of that cannot be overdrawn.

I had the same idea using a state specific credit union "cash card". I set it up so that I could provide funding at a distance, IF asked, and IF I agreed. I could add money quickly just like SS340 did. The person that I was enabling didn't make it work and lost the card. I got it re-issued to me, keep $100 on it, and use it when I worry about a transaction.

Here's information about the card. Maybe financial institutions in other states have something comparable. Two disadvantages: It costs $1 per month and the card doesn't have the charge-back protections that a credit card has.

https://www.ncsecu.org/Cards/CPG.html

Here's a Jan. 2016 article about other money cards: http://creditcardforum.com/blog/review- ... id-ripoff/

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