Helping kids understand the concepts of banking and smart spending can set them up for financial success later in life. As banking experiences become increasingly digitized, getting your child their first debit card can be a wise strategy.
While a debit card can help your child learn about money, most cards have age limits. If you are considering getting your child a debit card, here’s everything you need to know about age requirements and what to look for in a debit card.
What’s the Minimum Age to Get a Debit Card?
The age requirements for debit cards vary from bank to bank. Generally, the minimum age to get a debit card is 13 years old. However, some platforms offer options for children as young as six.
A parent or guardian will need to sign up for a joint checking account to give their child access to a debit card.
Keep in mind that your child’s age significantly impacts their debit card options. Younger children have fewer choices when it comes to debit cards, but older children and teens will have more options.
Does a Debit Card for Kids Make Sense for Your Child?
From Greenlight to GoHenry, there are many debit card options for teens. That said, when you are thinking about getting a debit card for your child, it’s important to consider the decision thoroughly before jumping in. A debit card is a major responsibility.
Here’s when a debit card makes sense for your child.
They Have a Regular Income
Getting a debit card is a no-brainer if your child earns money consistently.
Kids and teens with a steady after-school gig might find that a debit card is the easiest way to spend their hard-earned dollars. For example, they can get their paycheck deposited directly into a checking account for easy access through a debit card.
Kids and teens receiving an income in the form of an allowance might also benefit from a debit card. Like a paycheck, parents can push allowances directly into a checking account tied to their child’s debit card.
If your child doesn’t have a regular income, then a debit card might not make sense at this stage.
They Have Regular Expenses
Even if they don’t have a regular income, many kids have regular expenses they have to cover without a parent present. For example, teens might have to pay for gas or swipe their cards to cover a school lunch.
A debit card is a convenient way to pay for the things they need. When they coordinate their spending needs with a parent, they can avoid the need to carry cash.
However, if your kids rely on you to cover their expenses, it’s best to discuss things before signing up for a debit card.
They Can Use a Card Responsibly
A debit card may come with unfettered access to an entire checking account balance. Even though parents can limit spending abilities, a debit card is a big responsibility.
If you don’t think your child is prepared to keep track of a physical debit card and monitor their spending, then they might not be ready for one.
Think about how your kid treats other responsibilities in their life. If they have a solid track record of keeping tabs on important items, like cash or a phone, then adding a debit card to the mix might not be a bad idea.
But, if they aren’t able to easily keep track of their other belongings, like a backpack or house keys, then a debit card might not be the right fit.
They Have Some Independence From You
Kids and teens who aren’t put in a position to buy things regularly without their parents present likely don’t need a debit card.
It’s still possible to use physical cash on the rare occasion they need to buy something. But a debit card might be helpful if they buy things at least a few times a month without a parent present.
Pros and Cons of Having a Debit Card for Kids
Every financial choice has advantages and disadvantages. Here’s what to keep in mind before getting a debit card for kids and teens.
- Debit cards offer more security than cash
- Spending limits make it challenging to overspend
- Kids can build money confidence
- Some debit cards for kids have monthly fees
- Won’t help kids build credit
- Debit cards lack the robust fraud protection of a credit card
What to Look for in a Debit Card
If you decide that a debit card is the right fit for your kid, don’t settle for the first debit card that comes along. Instead, take some time to shop around for the best debit card option for your kid.
Here are some key things to consider as you evaluate different products.
Digital banking is the way of the future. In fact, most adults choose to manage their finances on the go. With that, it’s smart to choose a debit card that offers an accompanying mobile app.
A robust app can help your child start to get comfortable with managing their money directly from their smartphone. Look for an app that offers a full suite of features and great customer reviews.
Many kids start their banking journey with a joint account with their parents or guardians. While a joint account is a useful way for kids to learn the basics of digital money management, it’s not the right place to stash a parent’s funds.
Instead, parents will want an easy way to transfer funds from their account to their child’s account. Many banks make it easy to link accounts for seamless transfers. However, you’ll want to double-check the ease of making transfers before committing to a bank.
Bank fees are the worst. It’s a good idea to start teaching this important lesson to your child as soon as possible. With that, take the time to shop around for an account with minimal fees.
A few notorious fees to watch out for include overdraft fees, monthly maintenance fees and minimum balance requirement fees. Fortunately, many banks that offer an account for kids limit the fees.
Nevertheless, it’s worth double-checking before you sign your child up for a fee-riddled bank account.
As your child learns the ins and outs of managing their own funds, it’s critical to protect them from a potential overdraft. Sadly, it’s easy for those new to digital banking to encounter an overdraft fee.
Since this is a learning experience, find an account with overdraft protection that can act like training wheels for your child.
What Happens When Your Child Turns 18?
If you get a debit card for your child, you might wonder what happens to the account when they turn 18. The answer to this varies based on the bank.
Some banks may allow you to fill out a form that removes you from the account and puts it solely in your child’s name. Other banks might require your kid to open an entirely new account.
Make sure to ask about any fees that come with the new account or the account upgrade. Certain fees that were waived for the original account might not be waived moving forward.
Debit Cards vs. Credit Cards
A debit card is a useful way to learn about digital money management. However, debit cards aren’t the only plastic spending method out there. Credit cards are a second option that many Americans have in their wallets for convenient spending.
While both seem similar on the surface, credits are different from debit cards. Here’s a closer look at the key differences.
Credit cards offer more extensive fraud protection features than most debit cards. If you are concerned about fraud, credit cards are often considered the more secure option.
With a debit card, you are limited to spending what is in your bank account. If you are paying with a credit card, you can spend up to a maximum limit.
Credit cards open the door to potentially taking on debt. Since they are often tied to high interest rates, it’s best to avoid credit cards if you don’t have your spending under control.
A credit score is a key number that opens the door to financing opportunities. You can build your credit history with a credit card, but that’s not possible with most debit cards.
If you overspend on a debit card, you’ll encounter an overdraft fee. If you overspend on a credit card, you might slip into credit card debt with steep interest rates that will drag you down.
Kids and teens can learn about digital money management using a debit card. While some financial institutions offer debit cards for children as young as six, most only work with teens who are at least 13 years old.
Take the time to find a card that offers the features you feel will best help your child gain the financial experience they need. This can start them off on the right foot as they become financially savvy consumers.