Ever wish you could give your child a debit card for day-to-day expenses without having to transfer money out of your checking account all the time or worrying that they'll blow a bunch of money without getting your permission first?
In a push to find new customers, banks are taking cell-phone providers' lead and establishing checking accounts that allow families to share one account by letting parents set limits on how family members use debit cards. BAI Banking Strategies has an interesting article on how modern account management software allow banks to offer accountholders the ability to micromanage kids' purchases:
… The system can alert the primary account holder when the card assigned to his 13-year old son is used to purchase something over the specified $100 spending limit or at an unauthorized location such as a liquor store. The transaction can then be denied. Customized authorization and spending controls such as this can be implemented quickly through special software scripting capabilities.
This has the advantage of allowing multiple family members to work from the same account. If that doesn't seem like a big deal, think about having every kid in a family having a separate checking account and having to make sure they don't overdraw, spend all their money on a pair of $150 sneakers, or make any number of rookie mistakes young kids might make with the purchasing power a debit card gives them.
According to the BAI article, a family account management setup also puts another potential parent fear to bed: that kids inexperienced with handling debit cards will lose one and force everyone in the family to put a hold on their accounts and wait for new cards to arrive. Instead, the family account management would allow a bank to shut down one card without shutting down the whole family's account and cards.
In a rising bank-fee environment like the one we're in now, family banking holds a big advantage: cost savings. Just as a family cell phone plan can be win-win for the provider, who gets to sell more services, and the family, which generally gets more bang for the buck than they would buying plans separately, checking account consolidation could allow individual family members to avoid paying separate monthly service and other fees.
Such a system would also save parents from having to pay what have historically been pretty high fees to load money on prepaid debit cards.
What do you think? Would you be comfortable being a one-checking-account family?