American Express Co. has launched the Pass reloadable prepaid card designed for parents to give to their teenage children to manage help their allowances.

Cardholders may use Pass cards anywhere AmEx is accepted. Parents pay monthly fee of $3.95, which AmEx is waiving through October. The fee per cash withdrawal is $1.50, though parents can disable ATM access.

Funds in the card account never expire, and the card includes such AmEx perks as roadside assistance and purchase protection. Users also can get deals on music at the Sony online music store, according to the Pass website.

Parents may load the card account using their own AmEx cards or through an automated clearinghouse debit from their checking account, according to an AmEx fact sheet, which did not say whether parents also may reload the prepaid accounts using a MasterCard or Visa card.

Applicants may select the card’s color and an image that appears on the card.

AmEx is positioning the card as a safer alternative to using cash or credit or debit cards. If cardholders lose their card they can replace it, and the card offers no risk of overspending because it is prepaid.

To get the card, adults 18 years or older must register and load the Pass card online at the AmEx Pass card website. They must verify that the user of the Pass card is 13 years or older.

An online account-management service enables parent to view transaction histories and monitor spending, receive e-mail alerts when account funds are low or notifications when transaction occur. Parents also can enable or disable ATM access, inquire about card balances and reload funds of up to $2,500.

Teens also can manage their accounts online, including viewing transaction histories and setting up text alerts to receive balance and transaction information.

The Pass effort is not AmEx’s first foray into the teen payment card market. In 2000, AmEx and Zowi Corp. issued the Cobalt card, according to an AmEx spokesperson.

“We discontinued the Cobalt card because our partner, Zowi, closed its business operations,” she says. “However, American Express continued to believe, and still does, that there is an opportunity within this space for a better and safer form of currency for parents to give teens.”

And analysts say the plan to target the teen card market is sound. “The concept is right on; the need is there,” says Ron Shevlin, analyst at Boston-based Aite Group.

The downside is the card costs parents $48 per year, Shevlin says. “That’s a huge amount for someone to pay,” he says, noting the annual fee on an AmEx green charge card is $95. “So for half that much … , you get the privilege of having this Pass card.”

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