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Mintel recommends teenagers as potential target market for prepaid debit
Chicago (July 31, 2008)-For the teen who wants it all, a prepaid debit card may be the answer, says Mintel. Conveying "cool" status and making payments easier, prepaid cards also offer security and control for parents. A new report from Mintel suggests teenagers-and their parents-could be a lucrative target for prepaid debit cards.
Prepaid cards have many teen-friendly features, according to Mintel. Unlike credit cards, they carry no risk of debt or overdraft fees; cardholders can only spend the amount of money pre-paid onto the card. Additionally, prepaid cards offer the protection of a credit card and the opportunity to build credit. The cards are generally accepted wherever credit and debit cards can be used.
"Because most adults qualify for credit and are comfortable purchasing with credit cards, they aren't necessarily the ideal target for prepaid debit cards," comments Susan Menke, senior analyst at Mintel. "But teenagers, who may not qualify for traditional credit cards and whose parents are likely uncomfortable with them spending on credit, are the perfect target for prepaid debit."
Mintel's consumer research finds that parents like the idea of prepaid cards. Three in five (62%) respondents with children attending or planning to attend college are interested in having their children use a prepaid debit card rather than a credit card. Many prepaid cards come with safety features like allowing parents to monitor spending or requiring authorization for online use.
Mintel Comperemedia, which monitors trends in direct marketing, has tracked a few prepaid cards marketed to teens and parents. For example, an email campaign from PAYjr promotes its prepaid MasterCard as a way to "start teaching your teens financial responsibility today." It explains the card's parental control features and highlights the importance of teaching teens money management skills.
"Because prepaid cards are a safe way to give teens experience using plastic, they appeal to both parents and teens alike," states Menke. "Card issuers and banks might look at prepaid debit as a way to build brand loyalty and trust from an early age, tapping into teen spending today and adult spending and credit tomorrow."
Mintel Comperemedia provides competitive intelligence for businesses looking to advance and improve their direct marketing strategy. Tracking direct marketing (including mail, email and print advertising) targeted at consumers, small businesses and insurance agents, Mintel Comperemedia offers a unique perspective on everything from banking trends to insurance trends to credit card statistics. For more than 38 years, Mintel has provided insight into key worldwide trends, leading the industry for consumer, product and media intelligence.
Joanna Peot
Public Relations Executive
312-628-7946
jpeot@mintel.com