Debit cards for kids have hit the market in a big way and it’s leaving many parents wondering, “Should we?” and “When?” Much like the cell phone debate, the kid debit card debate seems to center around when is the best time for a kid to have access to their own money and what are the benefits of having a debit card?
Well, deciding if your kid should have one really is up to you and your family dynamic. Every family is different and children mature at different rates so you know best when your kid is ready for the responsibility of managing their own finances. Most of the cards available recommend between middle school and high school.
The benefit of the cards, in theory, is that it teaches kids good financial management. But, all of them take parent oversight. The Greenlight Card, for instance, allows the parent to direct funds to specific buckets, meaning money is allotted in specific amounts for specific types of spending. One of those buckets is a Giving bucket, which teaches your kids about charitable donations.
Parents can also control which stores and restaurants are approved for your child to spend money there. And, you can set limits on how much they can draw from ATM’s. The app associated with the card sends you notifications when your kid has used the card and allows you to make on the spot changes to the limits you’ve set. There is a $4.99 per month fee for this card.
So how do your kids get the money in their account? Should you just give it to them? Should they have to earn it? That’s up to you. Greenlight allows you to allot money based on a set of chores that your kids have to do to earn it if you want.
But the debit card isn’t just about spending. It also encourages saving. With Greenlight and FamZoo, parents can set up a savings with interest so kids can learn the benefit of saving their money. There are several card options out there all offering a similar set up. Here are the links to some of the best ones so you can compare and decide what’s right for you and your kid.