Are you considering giving your child a debit card? You probably wondered if you were making the right decision. Credit cards promote the effortless spending of money. As an adult, you are likely to understand the implications of each swipe. However, the same cannot be said for children.
They are unlikely to understand the value of money and why managing it is vital.
When your child should open a bank account
The decision to open a bank account for your child is entirely up to you. It usually depends on their maturity and financial knowledge. As a general rule, children should open a bank account when they start saving money.
A bank account is one of the best gifts you can give your child. It promotes a culture of savings and can foster financial maturity. Giving kids debit cards for their bank accounts might be a smart move if they already know what they’re doing.
Debit cards allow children to practice responsible spending. It encourages them to adopt responsible purchasing behavior. It’s crucial to have the conversation about money as soon as possible.
Make them understand the benefits of saving and spending.
When should you give your child a credit card?
There is no specific age for giving your children a debit card. However, 12 is a good age for most children. At this 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 handle large sums of money.
When your child is still striving to reach financial maturity, consider getting them a prepaid debit card. Teen checking accounts are ideal when your child has a part-time job.
Here are some debit card tips to keep in mind;
- Explain how credit cards work and why they are essential.
- Create a contract to spell out the basic rules of the card.
- Keep track of your child’s expenses and hold them accountable if necessary.
- Take advantage of every learning moment to promote financial literacy.
Debit Cards for Children – What are your options?
Parents generally have two options for credit cards for children: open a checking account for them or get them a prepaid debit card. Depending on where you live, you may find financial service providers offering checking accounts and savings accounts for children.
Generally, you and your child will be co-owners of the account. You may need to act as a gatekeeper. Children aged 12 and under may be restricted to savings accounts with ATM cards. Teenagers are generally allowed to hold debit cards.
They can use the cards to make purchases in stores. When your child is old enough for a credit card, check out your options on the iSelect Credit Card Comparison. You can save a lot of time and you have access to the best credit cards for your needs.
In conclusion, there is no age to give your child a debit card. It all depends on their financial knowledge and maturity. But 12 is a pretty decent age. If you’re considering giving your kids a credit card, make sure they understand why it’s essential.
The more information they have, the more responsible they will be. Comparing the different options will help you find the cards with the lowest interest rates and the best terms.
If you’re not sure if your child is ready for a credit or debit card, invest time and effort in educating them. Make sure they are ready before issuing cards.