Getting your child started with a debit card early can help them be more money savvy.
Here are some of the best options.
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Why should I get my child a debit card?
Technology is integral in most of our lives, and kids too. I’m sure you’ve even seen a toddler that knows how to navigate a phone or tablet. Why not use the technology to encourage healthy money habits early? Read more about it here.
Setting up a debit card for your child may seem kind of scary. There are lots of risks when it comes to putting your child’s information online. Identity theft and selling data are unfortunately, pretty common.
What are the risks?
Financial literacy begins early, most kids understand the value of money by age seven. At this age they also start to understand how it is earned and exchanged for goods. However, they are still learning the difference between necessity and luxury. This happens to be a topic that many adults struggle with too.
There are man benefits to opening a prepaid debit card for your kid. It gives them a real life, hands-on experience, but under your guidance.
You would make an account on their behalf and link it to your bank account. This will allow you to transfer money onto their card.
Most of the best cards for kids track when and how the money is spent. They are also equipped with saving and investing tools and suggestions. Many parents will transfer money for completing chores, or just give it as an allowance.
There are some reasons that putting your child’s information online is riskier than doing it for yourself:
- Child-specific laws- The Children’s Online Privacy Protection Act targets children under 13. Their parents are required by issuers to outline what information is being collected and obtain consent. Some issuers will sell data to third parties, so be careful.
- Purchase protection- If your kid loses their card or it gets stolen, some issuers will offer refunds on fraudulent purchases. This typically comes as an additional cost.
- Card security- Prepaid cards have a chip and are password-protected. That means they require a pin or face ID to access the account.
- Locking capability- Most kid friendly debit cards come with a parental locking feature. This allows for additional protection if the card is stolen. The card can typically be locked right from your phone.
- Consumer protection- Cash can get lost. Prepaid debit cards issued by FDIC-insured banks protect up to $250,000.
What debit cards are best for kids?
You want to teach your kids about financial responsibility, but you don’t want your family’s personal information at risk. Here are some of the best options for kid friendly debit cards.
- GoHenry- Your child can get started with a card at six years old with this service. It is $4 a month per child. It is best known for their personalized cards and customizable tasks.
- BusyKid- With this debit card, you can add unlimited children. This is ideal for parents that are trying to teach their kids about growing their savings.
- Greenlight- There is a monthly fee, depending on how many kids, up to five. Parents can designate a certain allowance to specific store and pay interest on growing balances.
- Axos First Checking- The minimum age is 13. This is a free app that teaches teens about checking accounts and debit cards.
- Step- There is no minimum age requirement, but it is best suited for older kids. The Step card draws out of the deposited funds, but processes the purchases as credit. This allows your kid to build credit without overdraft fees or interest.
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