Update: May 19 at 11:05 p.m.:

It used to be only credit cards were the debt trap of college students: suddenly independent with unlimited spending.

Now parents have become a bit smarter, instead sending their kids to school with debit cards containing only a set amount of cash, and that’s made pre-paid debit cards have become the latest rage.

36 billion dollars were loaded onto the cards in 2010, and that figure is expected to double this year.

The set amount of cash encourages financial independence, forcing kids to budget their money to ensure it lasts.

But consumer experts say: buyer beware. Prepaid debit card fees can be extraordinary.

Suzanne Martindale, a Staff Attorney for Consumers Union said, “There are monthly fees, there are activation fees simply to start using the card, there is almost always a fee to withdrawal cash at an atm.”

Consumer Reports recently analyzed 12 different prepaid debit cards. They found that on average, consumers were constantly dinged with small fees, that quickly added up to anywhere from $200 to $600 a year.

Just holding onto the cards could cost you. Many prepaid debit cards have a non-activity fee that can be as high as $19 a month.

So what's the alternative for your college student still on the family payroll? Consider a traditional bank account with an ATM card, funded by automatic monthly payments from your account to theirs.

Most banks don't charge for online person-to-person payments, and that ensures spending never exceeds the monthly allowance.

“I would not send my kid to college with a prepaid card because the checking account is really a viable option,” Martindale suggests.

Martindale said that will help parents promote financial independence, and inactivity won't cost you.

Consumers should be aware that checking accounts could also have hidden fees, and even an automatic overdraft fee. Consumer experts advise you to read all the fine print.

Original Story:

Most everyone has heard about the dangers of credit cards and young adults. They can be a debt trap of college students: suddenly independent with unlimited spending.

But it’s not just credit cards you should be worried about, pre-paid debits cards can be just as tricky, and with even more fees that most credit cards. That’s according to a recent Consumer Reports study.

Tonight at 10, we’ll take a look into the hidden fees these cards could be charging.

What about you? How do you handle your kids’ finances when they’re still on the family payroll?

Have you ever been hit with fees that you didn’t know were coming?