Do you plan on giving your kid a debit card? You’ve probably wondered if you are making the right decision. Credit cards promote effortless spending of money. As an adult, you are likely to understand the implications of every swipe. However, the same cannot be said for children.
They are unlikely to understand the value of money and why it is vital to manage it.
When Your Child Should Get a Bank Account
The decision of when to get your child a bank account is entirely up to you. It generally depends on their maturity and financial knowledge. Generally, kids should get bank accounts when they start saving money.
A bank account is one of the best gifts you can get your child. It promotes a saving culture and can promote financial maturity. Giving kids debit cards for their bank accounts could be a smart choice if they already know what they are doing.
Debit cards allow kids to practice responsible spending. It encourages them to adopt responsible buying behavior. It is crucial to have the money conversation as soon as you can.
Let them understand the benefits of savings and spending.
When Should You Give Your Child a Credit Card?
There is no specific age to give your kids a debit card. However, 12 is a good age for most kids. At that point, they have a level of financial maturity and understand what they are doing. However, you can start earlier or later, depending on your child’s needs.
Give your child access to small amounts of money and increase it gradually. By the time they reach adulthood, they can easily manage large amounts of money.
When your child is still striving to attain financial maturity, consider getting them a prepaid debit card. Teen checking accounts are ideal when your child takes up part-time jobs.
Here are a few debit card tips to keep in mind;
- Explain how credit cards work and why they are essential.
- Create a contract to spell out the ground rules of the card.
- Keep track of your child’s spending and hold them accountable when necessary.
- Take advantage of every teachable moment to promote financial literacy.
Debit Cards for Kids-What Are Your Options?
Parents generally have two options for credit cards for kids-opening a checking account for them or getting them a prepaid debit card. Depending on where you live, you may find financial service providers with checking and savings accounts for kids.
Usually, you and your child will own the account jointly. You may need to act as the custodian. Children aged 12 and under may be limited to savings accounts with ATM cards. Teens are usually allowed to hold debit cards.
They can use the cards to make purchases in stores. When your kid is old enough for a credit card, check out your options at iSelect credit card comparison. You can save a lot of time, and you get access to the best credit cards for your needs.
In conclusion, there is no right age to give your kid a debit card. It all depends on their financial knowledge and maturity. However, 12 is a pretty good age. If you plan on giving your kids a credit card, ensure that they understand why it is essential.
The more information they have, the more likely they will be responsible. Comparing different options will help you find cards with the lowest interest rates and the best terms.
If you are unsure that your child is ready for a credit or debit card, invest some time and effort into educating them. Ensure that they are ready before issuing any cards.