American Express has launched a new card targeted specifically at teenagers.
The Cobaltcard joins Visa’s Buxx in attempting to capture teen spending, estimated at $140 billion last year. American Express has responded to criticism that it will encourage teens to spend by making it a stored-value card, as opposed to a credit card. This means that it needs money put onto it from a checking account or a parent’s card, removing the need for credit.
Young adults are also big online spenders, and Cobaltcard is designed to be used on the web. Parents of under-18s can see where their children’s money is being spent on the internet. Amex also claims it can prevent the card being accepted by adult websites.
Teens over 16 do not need parental approval, though parents will be informed that the card has been issued. There are no annual fees.
News source: Wall Street Journal