A debit card for minor children may not sound like a good idea, but there are circumstances when it can indeed be a good idea. As children get older, it is important to consider how they will begin paying for items on their own when parents are not by their side. A debit card may be a helpful tool.
Advantages of a Debit Card for Minor
A debit card is not a credit card. There is no credit involved in using this type of card. When the card is swiped for a purchase, the purchase amount is automatically withdrawn from the associated checking account. Therefore, users are not borrowing money to use the debit card but merely removing their own money from their accounts.
In this situation, it can be a good idea to allow your older teen to use a debit card. Here are some examples of how this can be a good experience for your child.
Teach Wise Spending Habits Now: The use of a debit card allows your children to learn how to make wise purchases. Rather than giving them a credit card where they can spend freely up to the credit limit, they are forced to make good decisions about their use with the debit card.
Money Available: Teens will frequently come into situations where they need access to money to make a purchase. They may need to buy gas or may need to use a card for a deposit. In these situations, the debit card will give them that benefit without the risk of a credit card which they could use to overspend.
Safety: Many debit cards come with protections from fraudulent charges. Check with your bank about the availability of these protections. These protections can make using a debit card safer than using cash. Should a thief see your child carrying a large amount of money, your child may be more at risk for theft.
Getting a Debit Card
Obtaining a debit card is usually a simple process. If your child does not have one already, visit your local bank or the bank's website. Open a checking account in your child's name. If the child is a minor, you may need to cosign on the account, which simply means that a parent's signature is necessary to open the account. You will take partial responsibility for that account.
When selecting a debit card for minor children, keep the following in mind:
- Select a company that charges few fees. All banks must provide you with a fee schedule of all fees which are charged or could be charged associated with the type of account you open.
- Look for a bank that does not charge for obtaining a debit card. Some companies charge a fee for this service.
- Consider any benefits which the bank may offer. Some banks, for example, will allow you to waive fees if you have a paycheck directly deposited into the account on a regular basis. If your child has a job, find out if direct deposit is available from their employer.
Before opening any debit card for an adult or a minor, it is critical to read the terms of service and any other documentation. Compare several companies to find the most affordable options. Some banks do have limitations on who may obtain a debit card. The more you know in advance, the better your decision will be.