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“Can I have $20?”: When to give your child a debit card

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Teaching financial literacy to teens and kids can have a meaningful impact on their financial futures. A 2019 EVERFI Money Matters study found that one of the biggest concerns college students have is not knowing how to manage money. In fact, 53 percent of survey participants indicated that managing money was the college-related challenge they felt the least prepared to tackle.

One effective way to provide a child with financial management experience is to give your son or daughter a debit card. Learning how to use a debit card responsibly can provide young people with many benefits—from financial independence and confidence to real-life budgeting practice.

The key, of course, is to figure out when to give your child a debit card. Not only do you need to make sure your child is ready for the responsibility, but you’ll also need to check with your bank to find out the rules. Some financial institutions require children to be a certain age before they can get a debit card in their name, while other companies may offer debit cards for kids without age restrictions.

That’s where Greenlight can help. Whether you’re looking for one of the best debit cards for kids or are hoping to teach financial literacy to teenagers, Greenlight’s debit card and app have the tools your children need to learn how to manage money responsibly. Greenlight also lets parents automatically deposit allowance money or other forms of cash directly into their children’s debit account—which means that once your children learn how to use Greenlight, they’ll be able to see exactly how much money they have available to spend.

Financial benefits of a debit card

A debit card can offer a number of financial benefits to users of any age. If you think you might be ready to help your child open a first debit card, here are some of the perks that debit cards for kids and teenagers could provide.

  • Convenience. Having a debit card makes it easier to make purchases—both in person and online—without having to carry around cash.
  • Security. If your child loses their cash or someone steals from them, they might not ever be able to recover those funds. A lost or stolen debit card, however, may be eligible for certain protections under the Electronic Funds Transfer Act (provided you report the problem in a timely manner).
  • Sending money. The best debit cards for teens can make it easier to send money or to pay your children an allowance with an electronic transfer.
  • Money management skills. Some parents give their kids a set amount of money to use with their debit card each week or month. This structure can help demonstrate two important lessons—the importance of budgeting and the dangers of overspending.

It’s worth noting that credit cards can offer many of the same benefits above—but most children are too young to open credit accounts of their own, and a debit card is a much better way to learn about swiping, tapping, making purchases online and managing account balances. If you want to help your child establish credit before they leave the nest, you might consider making your child an authorized user on your credit card—but you’ll want to carefully consider the pros and cons of debit cards vs. credit cards before making your decision.

When to give your child a debit card

There are many reasons to give your kid a debit card—but how old should your kids be when you first give them access to debit? If you’re waiting for your child to be the “perfect” age to manage the financial responsibilities associated with debit cards, you might feel frustrated—and your kids might miss out on potential learning opportunities. Every parent needs to weigh a number of different factors when deciding whether their child is ready for a debit card.

Ages to consider

It’s wise to teach kids above money at an early age. In fact, your kids may be learning about money through observation without you even realizing it. A Money Advice Service study from 2013 found that kids as young as seven years old may already have an understanding of basic financial concepts.

Of course, the techniques you use to teach your children above money may evolve as they grow older. A young child who isn’t ready to carry a wallet or track spending on a smartphone app probably isn’t ready for a debit card. A middle schooler, teenager or college student, on the other hand, might be better prepared for the responsibilities.

Remember, you know your child better than anyone else knows them. That makes you the most qualified to make the decision about what ages to give your child a debit card.

First job

One of the best times to introduce debit to your kids is when they first start earning their own money. Whether they’re working a summer job or providing babysitting services to the neighbors, the process of earning and managing their own income can provide your child with the chance to learn critical money lessons—and adding a debit card to the mix can give your son or daughter an opportunity to practice making good choices with the money they earn.

New drivers

If you have teenagers or young adults who recently started driving, setting your kids up with one of the best debit cards for teens can be helpful in several ways. In addition to teaching financial responsibility for teenagers, a debit card can provide access to cash for gas or financial resources in case an emergency situation arises.

When your child frequently asks for money

Another clue that it might be time to set up a debit card for your child is if your son or daughter starts repeatedly asking for money. In some cases, a debit card can curb the constant requests for a few extra dollars here and there—in other cases, a debit card can help children learn how to save money for future goals instead of spending everything in their account as soon as they receive it.

Many parents give their child a set sum of money each month or week—perhaps as a chore-based allowance that must be earned. Once your child begins receiving regular deposits into their debit account, you can let your child know which types of expenses he or she will have to cover on their debit card and help them learn how to budget accordingly.

How to make sure your child uses a debit card responsibly

Learning how to use money is an important skill, but parents teaching financial responsibility to teenagers—or even younger children—need to develop their own skillsets. Here are three tips that can help you teach your child to use a debit card in a responsible way.

  1. Set clear rules. Before you give your child a debit card to use, it’s important to set clear expectations. Make sure your son or daughter understands which monthly expenses they’re expected to pay, when and where they can use their debit card and what actions they should take if an unexpected or emergency expense comes up.
  2. Take advantage of alerts and other parental controls, if available. The best debit cards for kids come with features that can help parents manage their child’s account. For example, you might be able to set up alerts, place spending limits and review spending reports on your child’s account. Not every bank offers these types of digital tools, which is why fintech services like Greenlight can be so useful when it comes to teaching financial literacy to teenagers. If your bank doesn’t have the features you’re looking for, you might want to shop around and review other debit cards for teens and kids to find a better fit.
  3. Have frequent money meetings. Before your kid starts using a debit card, it’s important to help them create a spending plan. The plan should clearly define any expenses for which your child is responsible—snacks, gas, streaming services, etc.—along with savings goals. Some families incorporate charitable giving into their children’s financial plan. Others use tools like Greenlight to teach their children about investments. Once your child has created a budget, you’ll want to meet with them frequently to be sure they stay on course. If you find that your son or daughter is overspending on unplanned or variable expenses, it opens the door for discussions about financial priorities and saying no to impulse purchases.

Why Greenlight could be a good option

Greenlight’s debit card for kids and teens is one of the best debit cards on the market—not only because it can help your children learn financial literacy skills, but also because it includes solid features that benefit the entire family. The prepaid debit card comes with an app that can be set up to do any—or all—of the following:

  • Let your kids earn money by doing chores
  • Easily transfer money from your bank account to a child’s reloadable accounts
  • Help kids set savings goals
  • Teach kids how to invest
  • Use parental controls like real-time alerts, balance tracking and withdrawal limits

The next time your kid asks if they can have $20, ask them how much money is left in their Greenlight debit account. If they don’t have enough set aside, they may have to wait until their next allowance deposit—which might make today less fun, but could teach your child the kind of financial lesson that will last a lifetime.

The bottom line

Debit cards can provide a child with critical money management experience before they enter adulthood. Before you sign your child up for one of the best debit cards for kids, ask yourself whether your child is ready for the financial responsibility—and be prepared for them to make common money mistakes, such as going over their budget or spending too much of their allowance on impulse purchases.

Services like Greenlight can give your children the freedom they need to learn from these mistakes, while giving you the ability to monitor and control the debit account as necessary. Knowing when to give your child a debit card is a key step in helping your children learn important financial literacy skills, so don’t put off this important milestone!

Written by
Michelle Black
Contributing writer
Michelle Lambright Black is a credit expert with over 19 years of experience, a freelance writer and a certified credit expert witness. In addition to writing for Bankrate, Michelle's work is featured with numerous publications including FICO, Experian, Forbes, U.S. News & World Report and Reader’s Digest, among others.
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