Last Updated on
DollarBreak goal is to empower readers to make better financial decisions. This post may contain affiliate links from our partners who share the same vision. Disclosure.
For many adults, it’s a lot easier to carry a debit than to manage cash. The convenience and flexibility of these cards have made them a default for modern financial management.
Our society is slowly shifting away from physical cash as the most common payment method to what is known as a “cashless society.”
This concept is quite prevalent in the USA, but we’re not alone in the progression. Countries around the world are following the same trend.
NPR reported on a developing trend in Sweden. Not only are the Swedes going cashless, but people are also inserting payment capable microchips in their hands.
Cards have become an essential tool for money management, and that’s not limited to adults. According to CreditCard.com, six million American families have at least one child that owns a payment card.
But can minors legally possess a debit card?
How old do you have to be to get a debit card, anyway? In this article, we discuss everything you need to know about equipping your child with a card and why it’s essential to instilling fiscal responsibility in your young adult.
Why Would a Minor Need Access to a Debit Card?
There are many advantages to owning a debit card. It’s not just a wallet that you can access with the swipe of your card. In fact, there are a lot of reasons why minors, in particular, need to get comfortable with managing their money digitally.
To name a few:
- Cards make purchasing a lot more convenient
- Family bank accounts make it easy for parents to provide their kids with money
- Digital banking prevents kids from overspending
- Cards keep money safe
- The right card can be a great tool to teach kids about money
As we move toward a cashless society, the temptation and ease for kids to spend recklessly on a debit card is a worry for all parents. A prepaid account eliminates this fear. Famzoo have come up with the perfect option.
You can link prepaid cards together, empower your kids in money management, and retain visibility and control. Set your kids a budget, load the card, and schedule a weekly meeting with them to go through their spending.
This will help you to teach your kids about limiting spending within a budget, and help them to onboard good financial habits before they get the opportunity to wreck their lives with debt.
1. Cards Make Purchasing More Convenient
Equipping your child with a debit card creates a reliable channel for ensuring they have safe and available access to money while they are out on their own.
Lunch money, funds for school events and programs, and other necessities can easily go on their cards, eliminating the need for you as a parent to keep cash on hand. The card allows you to afford your children a layer of independence.
2. Family Bank Accounts Make it Easy for Parents to Provide Their Kids With Money
This is really useful for kids who have gone away to college or frequently travel with sports teams. The ability to send your child money in real-time, no matter where they are, is incredibly helpful.
For many parents, a card offers peace of mind that cash simply can’t compete with.
3. Digital Banking Prevents Kids From Overspending
Debit cards and digital money management are now defaults when it comes to managing your finances as an adult. Equipping your child with these same tools is crucial when it comes to teaching the principles of smart spending.
Apps like these offer easy and practical ways to help your children learn how to manage money, save for the future, and invest in smart choices.
4. Cards Keep Money Safe
There’s nothing worse than losing your wallet and all the money that’s inside. While losing a debit card is inconvenient, a lot of banks offer crisis options, allowing you to block the missing card and order a new one.
Unlike cash, which is easily lost or stolen, cards prevent unauthorized users from withdrawing cash. This translates into an additional layer of safety for your child, reducing the chance that they will experience theft and bullying instigated by cash.
Why is Managing Money Via Card an Essential Skill for Kids?
It’s no surprise that the younger generations are adopting emerging technologies faster than any other demographic. They’ve grown up with access to the internet and all that it has to offer.
As a result, digital banking for this generation is not a luxury. Financial technologies are basic management tools that will support children throughout their lives alongside the responsible money management you teach them.
1. Checks Are Becoming Obsolete
When was the last time you issued or received a check? Chances are that it’s been a while, and there are a variety of apps and tools that offer faster, more efficient ways to transfer money.
Apps like Venmo, PayPal, and Acorns, along with feature-rich native apps offered by banks, are making it easy and cheap—if not free—to send money to friends and family, pay and lend small amounts to your peers, split checks, and even invest your spare change.
2. Money Management Via apps is the New Standard
Almost every well-established bank has some form of an online banking system, with a lot of them being in the form of websites, apps, or both. It’s one of the most convenient ways of managing one’s asset.
Popular banking apps allow users to set up notifications of low balances or automatic bill payments.
Introducing your children to real-time money management will help them make better decisions as they develop their own financial proficiency as they enter the workforce.
Many FinTech apps take a fun and relatable approach to saving and investing, encouraging young users to start stashing money early.
Banks like PNC offer features which allow users to automatically shift a percentage of deposits into a savings account, and even let users block off chunks of their money, reserving funds toward a specific goal.
This visualization of savings and easy access to interest calculators can help instill financial literacy in children in a way that makes savvy money management fun.
3. Equipping Children to Function in a Cashless Society
Americans are moving toward a distinct change in the way we manage our money. The “cashless” trend and the shift to a more virtual economy will only strengthen in the years to come.
It is highly likely that, by the time your child enters the workforce, the primary way they will engage with their money is through an app or digital platform.
Engendering them to digital management affords kids the ability to be more independent, without sacrificing safety or transparency.
How to Provide a Minor With a Debit Card
There are two main options you have for equipping your child with a card. You can either get a joint prepaid card for your child or make use of a virtual family banking service.
It is possible to secure a secondary card from your bank and give your child “unofficial” permission to use that card by providing them with your PIN.
However, many merchants will check the IDs of young card users, and can refuse to accept payment if the name on the card doesn’t match that on the user’s ID.
The other important consideration here is that the terms and conditions at most banks forbid anyone other than the account holder to use the debit card. Your account could be compromised, and you run the risk of earning hefty fines if you violate the rules.
Setting up an account specifically designed to support minors is the safest and most efficient method of equipping your child with a debit card.
How Old Do You Have to Be to Get a Debit Card at Most Banks?
In many countries—the USA included—only adults eighteen and over are eligible to get a debit card. Minors can’t access a debit card on their own, but they can be legally added to an adult’s account.
Services like Green Light Card support kids of all ages with prepaid debit cards. There are no minimum age requirements for these true prepaid solutions.
In 2020, the answer to “how old do you have to be to get a debit card” is “it depends.” You can get access to a debit card at any age, but finding the right account for your family is the challenge.
Options like High School Checking by Chase and Serve by American Express all offer financial products designed specifically for teens and minors. Even most local banks and credit unions will have some family options.
Not all of them, however, offer parental controls, which help to keep your child—and your money—safe as they use the account. Most of these accounts have a suite of awesome features, but there are restrictions to consider.
Be on the lookout for monthly fees, deposit limits, minimum balances, and hidden fees associated with reloading your child’s card.
Use a Family Banking Service
Alternatively, you can sign up for a virtual family bank service to set up your kids with their own prepaid cards. Virtual family bank services offer tools to allow the account holder to set up and manage a variety of sub-accounts—one for each family member.
The practical implication of this is that you can create different “accounts” for each of your children to use separately, all of which can be managed by you from one location.
According to the Balance, FamZoo was rated as the best overall family banking product and debit card service for teens. FamZoo provides cards for children as young as thirteen and offers options like chore lists, allowances, and sophisticated parental controls.
At just $5.99 per month for your whole family to use the account, and four cards free, FamZoo is a feature-rich and affordable option.
When it comes to financial products, offering independence to your children comes with the opportunity to make both good and not so good choices. There are a few things you need to take into consideration before providing your child their own debit card.
1. The Risk of Fraud
Children can be susceptible to shady individuals, online and offline, who could attempt to gain access to the money on the card fraudulently. Be sure to educate your kids about responsible card ownership.
2. Late Reimbursements
In the event a fraudulent transaction does occur, you won’t be reimbursed as quickly as you would through a credit card. Debit transactions have different fraud protection measures. Be sure to understand the terms and conditions on your account.
Just like any bank account, overdraft fees on prepaid accounts can get expensive. The spending limitations on cards like these help teach fiscal responsibility, but you’ll want to be careful of the costs associated with overspending.
Consider implementing parental controls or opening an account which does not permit overdrafts, and will simply decline transactions that can be furnished by the funds on the account.
So, How Old Do You Have to Be to Get a Debit Card?
Debit cards are becoming the new norm for modern money management. Over 47 billion debit card transactions were recorded in the year 2012 alone. They represent an integral part of our modern world and an opportunity to teach financial literacy.
Getting your child a debit card can make life easier for your family and also prepare kids to make better decisions as they grow up and become independent consumers.