What is a Debit Card for Kids?
Kids debit cards are a type of bank account that is designed specifically for minors. These cards are typically linked to a parent's or guardian's account and offer a convenient and safe way for kids to manage their money.
A kids debit card can be a great tool for teaching children about financial responsibility and budgeting. Parents or guardians can help their children set savings goals, track their spending, and understand the value of money.
How do Kids Debit Cards Work?
The kids debit card is linked to the parent or guardian's account, allowing the parent or guardian to manage the child's spending and monitor their transactions. The card can be used to make purchases and withdraw money at ATMs. The money is usually transferred with a direct deposit.
Parents or guardians set spending limits on the kids debit card, helping them to manage their money and avoid overspending. Some banks may also offer the option to set limits on the types of transactions that can be made, such as online purchases or ATM withdrawals.
There may be fees associated with using a kids debit card, such as overdraft fees or foreign transaction fees. Some financial institutions allow up to five kids. Review the terms and conditions of the account to understand any fees that may apply.
Many kids debit cards come with parental controls, which allow parents or guardians to monitor their child's spending, view transaction history, and set spending limits. These controls can be accessed through a mobile app or online banking portal.
To open a kids debit card account, the child must be a minor and typically must have a parent or guardian co-signer. Some banks may have age restrictions and may require that the child be at least 13 years old.
Pros and Cons of Debit Cards for Kids
Pros
- Budgeting. Debit cards can help children learn about budgeting by giving them a set amount of money to spend each month. Children can track their spending and learn how to make their money last throughout the month.
- Financial responsibility. Debit cards teach children the importance of being responsible with their money. Children learn that once they have spent their money, they cannot simply get more without earning it first.
- Convenient. Debit cards are more convenient than cash, and children can use them to make purchases anywhere that accepts debit cards. This makes it easier for children to make purchases online, which can be especially useful for kids who do not live near a store.
- Security. Debit cards are more secure than cash, and parents can monitor their children's spending to ensure that they are not making inappropriate purchases. Additionally, if a debit card is lost or stolen, the funds on the card can be frozen or transferred to a new card.
Cons
- Fees. Some banks and card issuers charge fees for using debit cards, including monthly maintenance fees, transaction fees, and overdraft fees. These fees can add up quickly and reduce the amount of money that children have to spend each month.
- Limited availability. Debit cards may not be available to children who do not have a bank account or who do not meet certain age requirements. This can make it difficult for children to participate in certain financial programs or to make certain purchases.
- Overdrafts. Children can overdraft their debit cards just like adult accounts, resulting in fees and other penalties. This can be particularly problematic if children are not monitoring their spending closely or if they are making large purchases that they cannot afford.
- Reduced privacy. Parents can monitor their children's spending through online banking or through statements, which can reduce the children's privacy. Children may feel as though their parents are invading their privacy or that they are not trusted to manage their own money.
How to Compare Debit Cards for Kids
When comparing debit cards for kids, there are several key factors to consider. By evaluating these factors, parents can find the best debit card for their child and ensure that they are getting the most value for their money.
- Fees. One of the major factors to consider when comparing debit cards for kids is the fees associated with the card. Some debit cards for kids have monthly maintenance fees, transaction fees, and overdraft fees, which can add up quickly and reduce the amount of money available for spending. Parents should compare the fees associated with different debit cards and choose one that has the lowest fees or one that waives certain fees entirely.
- Age requirements. Some debit cards for kids have age requirements, which can limit the amount of time that children can use the card. Parents should choose a card that is appropriate for their child's age, and that will meet their needs both now and in the future.
- Interest rates. Some debit cards for kids offer interest on the balance, while others do not. Parents should consider whether they want their child to earn interest on the money in the account and choose a card that offers a good interest rate.
- Availability. Availability is another important factor to consider. Parents should opt for a debit card that is widely accepted and that their child can use to make purchases anywhere that debit cards are accepted.
- Security. Parents should choose a card that has strong security features, such as the ability to freeze the account if the card is lost or stolen and the ability to monitor the account online.
- Customer service. Customer service is also an important factor to consider. Parents should choose a card that has a strong customer service team that is available to help with any issues or questions that may arise.
- Rewards programs. Some debit cards for kids offer rewards programs, such as cash back on purchases or discounts on certain items. Parents should consider whether they want their child to participate in a rewards program and choose a card that offers a program that is appropriate for their child's needs.
- Budgeting tools. Budgeting tools can help children learn about budgeting and finance. Parents should choose a card that has budgeting tools that are easy to use and that will help their child keep track of their spending. There are also can be minimum balance requirements, depending on your financial institution.
How to Apply for Debit Cards for Kids
Applying for a debit card for kids is a simple process that typically involves opening a teen checking account for the child and selecting a debit card. Here are the steps to follow:
- Choose a bank or credit union. The first step in applying for a debit card for kids is to choose a bank or credit union. Parents should research different financial institutions to find one that offers the features and services that they are looking for, such as low monthly service fees, strong security features, and customer service.
- Open a checking account. Once you have chosen a bank or credit union, the next step is to open a checking account for the child. This typically involves providing personal information for the child, such as their name, address, and social security number, as well as information for the parent or guardian who will be responsible for the account.
- Provide identification. Parents will need to provide identification for the child and themselves, such as a driver's license or passport. Some banks may also require additional documentation, such as a birth certificate or social security card.
- Choose a debit card. Once the checking account has been opened, the next step is to choose a debit card for the child. Parents should choose a card that has the features and services that they are looking for, such as low monthly fees, strong security features, and rewards programs.
- Activate the card. Once the debit card has been received, the next step is to activate it. This typically involves calling the bank or credit union and providing information to verify the account.
- Set spending limits. Parents can set spending limits for their children's debit cards to help them learn about budgeting and finance. This can be done online or by contacting the bank or credit union. The children will be able to spend money according to these limits.
- Monitor spending. Finally, parents should monitor their children's spending to ensure that they are not overspending or making inappropriate purchases. This can be done online or by reviewing statements.
Best Debit Cards for Kids
When it comes to choosing the best debit card for kids, there are several options available.
Greenlight Debit Card
FamZoo Prepaid Debit Card
GoHenry Debit Card
Current Debit Card
Bluebird Debit Card
Parents should consider their specific needs and choose a card that offers the features and services that are most important to them. Factors such as low fees, availability of a direct deposit, strong security features, parental controls, real-time notifications, educational resources, and rewards programs should be taken into consideration when choosing the best debit card for kids.
