Debit cards for kids are a great way to teach your kids financial responsibility! Here’s how debit cards can teach your kids about spending and saving money, and some of the best debit card options to consider for your kids.
I got a credit card from my parents for my 13th birthday.
No new outfit.
No Converse high tops.
A credit card.
Okay, it was technically a debit card, but as a 13 year old girl I didn’t know the difference. All I knew is that it was a shiny new piece of plastic that I could use to buy things all by myself.
My parents deposited money in the account each month and I was able to spend that money however my teenage-girl heart desired.
I was in heaven. And that was the best thing that my parents could have done for me.
Debit cards for kids teach financial responsibility from a very young age, and I absolutely credit that 13th birthday gift for turning me into the savvy spender that I am today.
But how can debit cards for kids teach them to make good financial decisions? And what are the best debit cards to consider? And what if they go hog-wild in a candy store and overdraw their account?
I’ve provided all of those answers below so that you can decide if getting your kids a debit card is right for your family!
But my kids are too young to start learning about money management!
One of the main reasons for getting your kids a debit card is to teach financial responsibility. And if your kids aren’t even to elementary school yet, you may feel like it’s too early to start the lessons on personal finances.
However, studies done by behavior experts David Whitebread and Sue Bingham of the University of Cambridge show that money habits are actually formed in early childhood. And, in fact, further British research suggests that financial habits are formed by age 7.
That’s pretty scary considering I literally walked in to my 7 year old’s room a few months ago to find her throwing around dollar bills like a middle-aged man at a strip club.
As soon as your kids can understand the concept of money and that it’s used to buy things, you can start encouraging good financial habits. Even if you’re kids are WAY past the age of 7, don’t just give up and assume that they’re doomed to a life of living paycheck to paycheck.
If your kids had a piggy bank where they saved their quarters, or if you let them put $1 in the offering plate at church every Sunday, or if you rewarded them for doing chores, you were actually teaching your kids about being financially responsible without even knowing it.
And debit cards for kids are a great way to further teach your kids about good money habits!
How Do Debit Cards for Kids Teach Financial Responsibility?
Lesson 1: Money is NOT Infinite.
“Money doesn’t grow on trees.”
If I had a nickel for every time I heard that growing up (and every time I’ve used it on my own kids), then I’d probably be able to fund the R&D for my own money tree prototype. 🙂
Okay, I jest…
But debit cards do teach this important lesson. Money is not infinite. You can’t go out in your backyard and pick dollar bills off a fruitful plant.
It does run out.
So, it’s important to spend it wisely, and to carefully consider purchases that you make.
When kids are in charge of making a finite amount of money last for a specific time period, and when their accounts aren’t automatically replenished by the Bank of Mom and Dad when they’re out of funds, it teaches them to really think hard about the things that they want.
I’ve already seen this happen with my own kids. No, they don’t have debit cards YET, but they do get a chore-based allowance (using these awesome Printable Chore Charts!).
Since they earn their own money, I make them buy the things that they want (toys, jewelry, lip gloss, etc) by themselves.
*By the way, if you want to know HOW to give your kids allowance if you NEVER have cash, then check out this post: The Best Allowance Trackers for Kids: Give Kids Allowance without Cash!
So, whenever we’re at Target and they ask “Mom, can I get this necklace?”, I say “Sure, if you use your own money for it.” Nine times out of ten, they decide that they don’t really want it bad enough to spend their own money on it.
The same thing goes for debit cards for kids… If your kids know that they will have to swipe their own cards to pay for something that they want, they may think twice about making that purchase.
Lesson 2: You have to save for what you want.
Yup… it’s a catchy lyric, but it’s also a good piece of advice.
You can’t always go to the store and just buy what you want. Sometimes you have to save for larger purchases, whether it be a few weeks or a few years.
With debit cards for kids, especially ones that have recurring deposits from Mom and Dad for weekly allowances, kids can choose to save their money for more expensive things that they want.
My 10 year old daughter decided about 8 months ago that she was going to save her weekly allowance money for a MacBook computer. She hasn’t spent more than $10 of her money since she set that savings goals, and in the next month or two we will be heading to Apple to buy her a shiny new laptop.
Yes… it will be expensive. But, I would much rather her save her money for bigger more valuable things that she will actually USE for years to come, rather than spending every dollar that gets deposited into her account on little things that will probably just end up in the trash in a few weeks time.
Plus, since she is going to use her OWN money to buy it, she’ll probably take much better care of it.
Lesson 3: Track income and expenses.
Probably one of the BIGGEST worries of parents about getting their kids debit cards is the dreaded overage fees… And I’ll be honest… I paid my fair share of overage fees on my own debit card before I turned 16.
If you’re one of those parents that believes in teaching your kids through negative consequences and letting them make their own mistakes, then go ahead and let them overdraft their card AND pay the $35 fee each time. I bet your kids will learn really quickly about tracking their expenses and income so that they don’t keep wasting their own money on bank fees.
*If you want to avoid overdraft fees altogether, there are some GREAT debit cards for kids that I’ll tell you about later.
You can teach your kids how to keep a paper ledger or check register to track their deposits and withdrawals so that they always know how much money is available to spend on their debit card.
Tracking spending will also show your kids WHERE their money is going, and highlight wasteful spending. Plus, it will prepare them for budgeting their paychecks and paying bills later in life.
Be sure to check out my 9 Easy Tips for Tracking Expenses and Income here!
Lesson 4: Online banking is your friend.
Let’s face it… we’re living in a digital age, and that’s not going to change. It seems that EVERYTHING we do has some sort of online aspect to it… from church services to ordering dinner to paying bills.
So it’s important that your kids know how to manage their money online also.
Certain debit cards for kids also have online banking capabilities, which can give your kids a head start with using digital tools to manage their money, just like they’ll be doing in the “real world”.
What are the Best Debit Cards for Kids to Teach Financial Responsibility
*This post contains affiliate links, which means if you click a link and make a purchase, I earn a commission at no additional cost to you. Read my full disclosure here.
Traditional Bank Debit Cards
When I turned 13, my parents opened a bank account in my name at their bank (with them as the conservators) and ordered my debit card.
Now, 20+ years later, the process is still the same.
I was actually just meeting with our banker at Regions Bank last week and asking him about opening an account for my daughter when she turns 13. He confirmed that, yes, I can open an account for her (with my name listed on it also) and get her a debit card. And, since she would be under the age of 25, she would qualify for the student checking account, which means no monthly fees.
But be warned… that doesn’t necessarily mean no OVERDRAFT fees. Be sure to check with your bank to see whether their student accounts are subject to overdraft fees, or if the accounts don’t allow for spending over the balance.
Is the thought of opening a real-life checking account for your child is scarier than a late-night solo viewing of a horror movie?
If you’re not keen on the idea of an actual bank account for your kids, you can go another route while still teaching them to be financially responsible.
Here are some other great debit cards for kids:
FamZoo allows you to order your child a prepaid card and manage their spending through an award-winning family finance app.
Here’s how FamZoo works:
- First, order one or more FamZoo debit cards for each family member.
- Then load your “parent funding card” (which is YOUR FamZoo debit card) through direct deposit, bank transfer, or with cash.
- Once your parent card is loaded with money from YOUR “real world” bank account, then you can easily transfer money to your kids’ FamZoo cards. You can set up a recurring transfer for your kids’ weekly allowances, or you can transfer money instantly using the app.
- Then, you can use the app to track your kids’ spending and savings.
One of the coolest things about FamZoo is the ability to set “money rules” to automatically move money between different accounts at pre-set times. These “money rules” help teach kids about real world finances. Here are just a few of the “rules” you can set within the app:
- Automatically “bill” your kids for expenses like their own cell phone or data charges
- Encourage your kids to save their money by automatically paying them interest on their savings – You can set your own interest rate on the app!
- Pay kids for completing chores – And be sure to check out my Printable Chore Charts and Chore Cards here!
FamZoo costs as little as $2.50 per month, depending on the plan that you choose, but I think it’s well worth it to help my kids develop good spending habits that will serve them later in life.
Greenlight is another debit card made specifically for kids.
Just like FamZoo, Greenlight has an awesome app that allows for money management lessons, instant transfers to your kids’ accounts, and automated allowances.
Here are some other cool features of the Greenlight app:
- Allows your kids to “round up” extra change from every purchase to add to their savings
- Parents can get alerts anytime their kids’ debit cards are used
- Motivate kids to do chores by tying them to financial rewards
- Parents can decide if kids can use their debit cards at ATMs and how much can be withdrawn
Greenlight costs $4.99 per month, which includes up to 5 debit cards for kids. A custom debit card with a photo is available for an additional fee of $9.99.
But the BEST part is there are no transaction, transfer, or overdraft fees!
Are Debit Cards the Right Choice for your Kids?
As a debit card-carrier since the age of 13, I would HIGHLY recommend debit cards for kids, especially aged 10 and up.
And though it may seem WAY too early to get your kids their own debit cards, I would remind you that kids these days are getting cell phones, internet access, and gaming systems at MUCH younger ages than years past. I didn’t get my first cell phone until I turned 16, but yet my 10 year old daughter already has one.
So, if I’m willing to get her a cell phone so that she can socialize with her friends, then you bet I’m also going to get her a debit card so she can start learning about financial responsibility.
For a small monthly fee (about the cost of a cup of coffee), you can give your kids a real world financial experience to better prepare them for managing much larger sums of money in the future.
But if you’re still not on the debit card train, then I DO encourage you to develop some sort of system to give your kids a weekly allowance and start learning about money management.