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Best debit card for children



April is the month of financial literacy (who knew?), So we started thinking: What is the best way to teach your child about money in 2022? Your parents may have given you a cash grant, and your first part-time jobs may have paid you in paper checks – but your children are likely to earn, spend, and manage money entirely in a digital environment. This means that today’s parents need to change their financial advice from paper to plastic – that is, from dollar bills and birthday checks to debit cards and online banking apps.

“Introducing debit card children is very meaningful in our digital first world,” said Riley Adams, CPA and Senior Financial Analyst at Google. Adams, who shares advice on financial knowledge at Young and the Invested, has written a post about the best debit cards for children. “Parents should understand the features offered by each card on the market. Is a debit card specially built for a child worth the monthly fee many bring? Or should you contact your bank and ask if they offer a free debit card that your children can use?”

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We reached out to three financial experts to learn how parents can prepare for this important financial transition – and how you can prepare your children to handle real money in a digital world.

When is your child ready for a debit card?

How old is old enough for a debit card for children? Many banks require children of a certain age to open a debit card in their own name, and your children’s options may be limited until they are 13 or older – but some banks allow younger children to use debit cards that are connected to a parent’s check or savings account. Check with your bank or credit union to see what their age requirements are and what type of debit card for children is available.

In addition to bank-issued payment cards, there are several new fintech (financial technology) payment cards that are designed to help children learn to manage money. These cards, which are linked to a parent’s bank account, are often available to children as young as 8 or even 6 – meaning you can begin the process of teaching your children financial knowledge at a very early age.

“Some children show strong financial literacy and can handle a card as early as mid-childhood to preteen years,” explains Adams. “Others, not so much.” That’s why he likes debit cards that allow parents to set a spending limit and receive notifications when their children make a purchase. “This type of debit card works for both types of children and gives parents peace of mind, no matter where their children are from a financial standpoint.”

What types of debit cards are available for children?

If you are looking for the best debit card for children, you have two options to consider. You can help your child open a traditional debit card through a bank, or you can apply for a debit card specially designed to teach children financial knowledge.

“The market is filled with debit cards aimed at parents trying to teach their children how to manage money,” explains Amanda Monschein, financial advisor at Stratus Wealth Advisors. “These cards charge monthly fees, and several of the most popular and innovative products in this space include the Greenlight Debit Card for Kids, the FamZoo Prepaid Card and the GoHenry Debit Card.”

If you help your child open a debit card via a bank, the card will be linked to a checking or savings account in your child’s name. “Most banks offer debit cards that children can link to their own checking or savings accounts,” says Monschein. However, a debit card for children such as Greenlight, FamZoo and GoHenry is linked to the parent’s bank account, not the child’s. “These accounts are usually linked to a parent’s bank account and are managed exclusively in an app.”

Why would a child card be linked to a parent’s bank account? Because this allows the parent to customize the debit card to meet their child’s needs – whether they want to deposit money every time a child completes a scheduled activity, or whether they want to set a spending limit that prevents their child from blowing their entire contribution on television games or sweets.

“Money Management debit cards allow parents to assign chores to their children and only transfer the grant when the chores are complete and approved via the app,” Monschein told us. “Some debit cards allow you to apply daily or weekly spending limits or block spending on specific product categories. For example, a parent can set their child’s cards to allow unlimited spending at gas stations, but only $ 20 per week at Starbucks.

How can you choose the best debit card for your child?

Is it better to get your child a traditional debit card issued through a bank, or to register with a debit card such as Greenlight, FamZoo or GoHenry? It depends on how much work you are willing to take on – and how willing you are to pay a monthly fee.

Money management debit cards are most likely attractive to parents who want a lot of control over the process. “The primary characteristics that parents tend to like are the controls offered over where and how much their children can spend, ”says Adams. “You can make it too short to send notifications and alerts when children make purchases, which keeps you updated as a called parent.”

However, these types of debit cards have a cost – firstly in terms of the monthly fee for the card, and secondly in terms of your time. “These cards require parents to manage an app where they assign chores, accept transactions, set spending limits, review purchases, etc,” Monshein explains. “Many parents report that this management system takes about 5-10 minutes per day, ie over 30 minutes per week.”

Many bank cards, on the other hand, are free – and knowledgeable parents can come up with their own ways to customize their child’s cards to encourage financial responsibility and spending. “I started each of my three children with a grant at age 13 that is automatically credited to their checking account each month and has a debit card attached,” said Chris Hardy, CFP® and CEO of Paramount Investment Advisors, Inc. The monthly allowance is designed to cover all of his children’s discretionary needs during the year – birthday presents for family and friends, the purchase of clothes, entertainment expenses and so on – as long as it is managed wisely. “This method has allowed them to spend money on things that they think are important,” Hardy says, “along with making some mistakes and wishing they did not spend the money they did.”

How can you help your child use his debit card wisely?

The most important thing a parent can do, when introducing your children to debit cards, is to have a plan to help your child use debit wisely. This means that you are ready for your children to make mistakes – and that you are ready to help them get back on track.

One of the most important lessons you can teach your children is that certain times of the year – such as holidays and vacations – are more expensive than others. Hardy gives his children the same amount of money each month specifically so that his children learn to budget and plan ahead. “Some months there are few expenses and other months there are significant expenses that can be more than what they have coming in,” he explains.

You can also teach your children that they can increase their purchasing power not only by creating savings goals, but also by doing extra work. “Your child can make money on a special project that you can let them use in the video game store,” Monschein suggests. Many of us spend our working lives balancing traditional jobs and side jobs, after all – and if you teach your kids how to be smart income as well as smart spenders, it’s a win-win.

Finally, you can teach your children that the basics of personal finances and financial responsibility remain the same no matter how old they are. A child who learns to save money for a sibling’s birthday present can grow up to be a teenager who can save for a reliable used car – or an adult who can save for a down payment on a home. Once these lessons are learned, they will last a lifetime – whether you pay with cash, credit cards, debit cards, cryptocurrencies or whatever the future may hold.


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