At What Age Should Your Kid Receive Their First Debit Card?
Getting your kid their first debit card — like teaching them to ride a bike for the first time — can give you mixed emotions. You know that it's something they need to learn in order to manage their money as an adult. But at the same time, you might wonder if they're ready to handle more spending power.
Rest assured that parents can retain several different forms of parental controls with debit cards. Not only that, but a debit card can be a fantastic tool to help your child learn how to manage money.
Pros of a First Debit Card
There are many pros to getting a debit card for your child; one of which includes giving them their allowance in a more convenient way. Instead of having to stop at an ATM or giving them an IOU when their allowance is due, you can simply transfer the money to the checking account that's tied to their card.
There are also useful parental controls that allow you to manage and provide more oversight on your child's spending than you can with cash. As the joint owner of the card, you'll be able to log into online banking at any time and see the card activity and even sign up for account alerts to get notifications about their spending activity.
And debit cards can be more secure to carry around than cash. If your child loses cash or has it stolen, they cannot get it back. Debit cards come with protections against theft, which could come in handy if your child travels or goes out without you. You'll even be able to log in online and lock/unlock their card in case it is lost or stolen.
Finally, opening a debit card for your child offers the opportunity to set boundaries around their spending, while teaching them what responsible money management looks like.
At What Age Should They Receive Their First Debit Card?
While only you can determine when your child is ready for their first debit card, knowing the age limits for the various kid and teen debit cards can help you decide.
- KeyBank Hassle-Free Account: As the owner of the account, you can have a child as an Authorized Minor User starting at age 13. You can transfer money to the card through the mobile app, and even load the debit card onto a digital wallet so they can use their phone.
- Reloadable Prepaid Card: You can give a child a reloadable prepaid card. These are not tied to a financial account, and you can load a set amount of money onto them as often as you'd like to.
- Joint Checking Account with a Debit Card: You can jointly open a checking account with a child under the age of 18, and give them a debit card that way.
- Student Checking Account with a Debit Card: Many banks offer kid or student checking accounts with access to a debit card when a child reaches the age of 16.
If you want to give your child a debit card at a younger age, then you might choose a product with greater parental control, such as a reloadable prepaid card. As they age, you can give them more freedom with a joint or student checking account.
Money Conversations to Have Before Giving a Debit Card
Use these money conversation topics to further your child's financial education, and guide you in establishing clear boundaries around your child's spending.
The first conversation you have with them should explain where the card's money is coming from. You want to make sure they understand the difference between a checking account and a savings account, and that a debit card is only tied to a checking account. Does it come from a joint checking account, or from their own checking account? Who is responsible for funding the account?
Secondly, you want to establish an appropriate spending threshold. How much money is your child allowed to spend with their debit card without having to ask you first? Your spending threshold number will likely be a compromise between what you both want — especially if they're helping to fund the account — but it will still give you some control over their account balance and spending.
Finally, you'll want to discuss overdraft fees, how they occur, and how your child can avoid getting them. Does the account your child has access to allow overdrafts? Be sure your child understands what happens if there is not enough money in their account. If the account allows overdraft fees, then the transactions they're making will keep going through, but they'll incur an overdraft fee each time they don't have the funds to make the purchase. If the account does not allow overdrafts, then their card will be declined at the point of transaction. Talk to your child about your own routine of how you track the money in your account to avoid them.
By setting up expectations as well as regular check-ins to go over your child's spending and questions, you can open up a world of financial learning by giving your child their first debit card.