Each KTTW card is like its own account. You can fund each KTTW card any way you choose. So they can all go to one Credit Card or to mulitple cards or some to gift cards, or cash funded. That is probably the best way if you are worrying about kids overspending. That way, they know their limit, and you can add more later if that is appropriate.
As for Allowances, I respect all methods, paying for chores, paying for special tasks, "giving" them money, etc.
For us and our children, we chose a method that our parents had not. We told them at the age of about 8 that we would start giving them an allowance. We told them that chores were expected of them, no matter what, as members of the family, as was any other help we needed or they would offer. However, since we were spending money on them anyway, now that they were getting "older" we would start letting them decide how some of that money was spent. So we gave them an allowance, but in three parts. 1 part for them to spend as they see fit. An equal share that when into a college account, saved by them, for the future. And a third, smaller part, that they would donate to church each week. We felt like this gave them a chance to develop money skills and start making money choices, while still expecting them to help out around the house. At the same time it showed them the power of saving for the future and giving to others. It has worked out pretty well for us and for them. They have their own incomes now and are saving for a car between them, but they still get an allowance too and do a pretty nice mix of spending and saving it. Hopefully, it has helped them develop a healthy respect for money.
Oh, and smoothies are free at Vibe during Smoothie hour, and $3 or 4 at other times. (I think Edge raids the Vibe once in a while for Smoothies too). And I agree, my children didn't really feel the need to spend much money on the ship. At the ports was another matter!