Debit cards are used for approximately one-third of payments, reports the Federal Reserve Bank of San Francisco. But at what age can you get a debit card and why would you need one? For starters, you should know that debit cards don't carry the same financial risk as credit cards since there is no borrowing involved. Second, they are relatively easy to obtain and can make it easier to manage your money.
Some banks only issue debit cards to children aged 16 or older, while others have no minimum age requirements. Generally, minors must open a joint account with their parents in order to get a debit card.
Different Banks Have Different Policies
As a parent, you want your children to learn the skills they need to do well in life. Yet, you may be reluctant to talk about money and budgeting. After all, they shouldn't have to worry about these things from such a young age. What you may not know is that money habits are formed as early as age five, according to the World Economic Forum. Moreover, children's spending behavior can influence their financial decisions later in life.
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One way to teach your child good spending and saving habits is to give him a debit card. Each bank has a different policy, but you should be able to get him a bank account and debit card at age 16. However, some banks may issue debit cards to children as young as seven. Generally, kids and teens must open a joint account with their parents or legal guardians. Citizens Bank, for example, allows teenagers aged 16 or older to have debit cards in their name, but the card will be linked to a parent's checking account until they turn 17.
Greenlight, a fintech startup that offers debit cards for kids, has no minimum age requirements. Since you'll share a checking account with your child, you can track his spending and load money onto his card within minutes. Chase, Capital One, American Express and U.S. Bank provide similar options. For example, any child aged eight or older can apply for a MONEY Teen debit card with Capital One.
Choose a Teen Debit Card
Debit cards linked to a joint account enable parents to set spending limits, download transaction data and save toward shared goals. Most banks also offer mobile apps that support two or more users, giving parents visibility into how their kids are saving and spending money. Once you have downloaded the app, you can set automatic allowance payments, see your child's account balance and lock or unlock his debit card.
Ideally, look for a debit card and checking account with minimal to no fees. Greenlight, for example, charges $4.99 to $9.98 per month. Greenlight Max, the most expensive plan, offers 1 percent cashback on all purchases and other perks, such as cell phone insurance and identity theft protection. Kids can also buy fractional shares via a trading platform designed for young users. The MONEY Teen debit card doesn't have these features, but it's free of charge.
Consider the spending limit, too. Some debit cards allow users to spend up to $2,000 per day, depending on their account balance. Others give parents the option to set daily or monthly spending limits. Having a low limit and no overdraft protection can help your child avoid impulse buying. A good example is Alliant's Teen Checking, which has a daily limit of $100 for ATM withdrawals and $300 for debit card payments.
Last, teach your children how to use their debit cards safely. Make sure they understand that PIN numbers, debit card numbers, online banking credentials and other sensitive data should be kept private. Educate them about the dangers of sending money to strangers and clicking suspicious links asking for private information. Also, discourage them from using public WiFi when shopping online or accessing mobile banking.
- Federal Reserve Bank of San Francisco: 2020 Findings from the Diary of Consumer Payment Choice
- World Economic Forum: Children Develop Their Spending and Saving Habits by the Age of 5
- Citizens Bank: How Old Do You Need to Be to Get a Debit Card?
- Greenlight: Debit Card
- Capital One: MONEY Teen Checking Account
- Greenlight: Greenlight Plans
- Alliant Credit Union: Teen Checking