2 min read 09.03.2022 197
Best bank cards and apps for kids
You can make your kids and teens feel happy by allowing them to make decisions about their spending and saving. Like adults, kids need (pocket) money to take care of some of their needs and not run into financial problems. With bank cards and apps for kids, gone are the days when it was difficult to teach them to manage their own money. Now, let us explore the best ways to do this today.
What are Debit Cards for Kids or Teenagers?
Debit cards for kids are accounts that could be linked to a parent’s bank account or another source of funding to allow their children to receive money and learn to manage funds. They come with mobile apps. Some of them have separate apps for both the parent and the kid. In this way, overseeing your child’s expenditure and financial status is easy and convenient. Moreover, some of these apps can suggest ways kids can grow their income.
Children’s Debit Cards vs Children’s Prepaid Cards
A debit card is not the same as a prepaid card. Whereas the former is linked to a customer’s account with a physical bank or credit union, the latter is not and requires the user to load money onto it before it can be used for payments at physical stores or online shops.
Similarly, children’s debit cards are issued by banks for the accounts opened in their names. Before your child has their own savings account, a debit card might be a brilliant way for them to start spending money. It might be issued for free or for a little monthly fee. But one disadvantage of registering an account (for your child) with a major bank is that you can hardly monitor his or her spending. A lack of prompt notifications or a spending limit setting could be an explanatory factor. Having the account login details and receiving account statements in your inbox is inadequate for the financial supervision of kids nowadays.
On the other hand, a prepaid card can help you monitor your kid’s spending better than a debit card from a bank. You can set up instant alerts so that you will be informed anytime the card is used. Also, you can use the card to limit your child’s spending or even block it so that it cannot be used at some stores. Leading providers of prepaid cards for children offer features that are focused on parental control over the child’s account. However, expect to pay a fee for having a prepaid card.
What to Do Before Getting a Debit Card for Kids – How to Choose
If you do not know how to select a debit card for your kids, you might end up choosing wrongly. There are some factors to put into consideration before getting your kid a debit card. So, to make the right choice for you and your child, we recommend you think about the following:
Prepaid card and app
Of course, the first factor to consider is the card itself. What type of card do you want to open for your child(ren)? It might help to choose a prepaid debit card. This will give you adequate control over your kid’s spending. Better still, open a prepaid debit card that comes with a mobile app.
Getting children started with a prepaid debit card at a young age might help them get a head start in navigating the financial system as they get older, giving them knowledge of various financial products and organisations.
It is safer and better to find a major card network for the issuance of your child’s card. Do you want a card from Mastercard, Visa or another company? Alternatively, you can register an account with a bank app that issues a card from your preferred issuing company.
What are the fees charged in association with your preferred prepaid debit card at the end of every month or year? Ambiguous, hidden, or unnecessary fees – such as a fee for an online portal to check the child's spending or instructional tools to manage money – should not be related to your preferred debit card for your kid.
Parental control features
You want to ensure that you can control your child’s spending and be aware of all that happens on their account. An online account that allows you to know where money is going, fix a transaction limit, block merchants, track your child's spending patterns, and even remotely lock/unlock the card is a wise investment for both security and teaching them good skills for money management. Therefore, you should look out for adequate parental control features on the bank card and app for your child.
Can I Get a Debit Card for Kids Under 13?
Yes, kids below the age of 13 can be issued debit cards. However, it depends on the rules of your bank or financial institution. The age limit could also be determined by the banking law in your region/country. In some places, minors are not allowed to have debit cards issued under their name until they are 16 years or older. So, it is better to ask your bank or financial institution about the acceptable age limit before opening a (prepaid) debit card for your child.
List of Debit Cards for Kids
Traditional banks seldom have cards with parental controls features for you. They make supervising your child's account a challenging chore in the absence of the tools required to supervise account management.
Consequently, a new generation of financial firms has evolved to empower parents and their children to make financial decisions by providing them with the tools to handle money in the way they see fit. The following are the best-prepaid debit cards for your kids:
Take your kids’ financial learning and money management skills to a better level by creating a GoHenry account for them. It is an ideal option for kids between the age of 6 and 18. The app contains motivating videos and interactive quizzes that help them to learn how to save, invest, and a lot more. It offers accounts for children, parents, and a personalised Visa prepaid card. It allows parents to guide their kids’ progress through customizable controls, real-time updates, and other features. Furthermore, according to its company policy, it does not sell customers’ personal data to third parties without their permission.
In terms of cost, GoHenry offers a free trial for one month but charges a monthly fee of US$4 per kid, and an ATM fee of US$1.50 per transaction. Read our overview of GoHenry for more information.
Parents can use the Current app to keep track of their teen's spending in real-time, establish spending limitations, and even block certain merchants on its Visa-enabled prepaid debit cards. For student accounts, the company does not impose any fees or interest, so there are no unpleasant surprises when bills arrive. Current is a financial software for families of all sizes. However, parents are to pay US$36 per kid annually.
This Swedish option offers a virtual piggy bank with a weekly allowance and helps to motivate your kids to save money. It is a free app for your kids’ pocket money and chores. The website is in four languages: Swedish, Dutch, Norwegian, and English. It also has answers to money-related questions helping to develop better financial skills. Gimi is suitable for 7-18 years old children. Some options for this service are only available in a limited number of countries. For example, the account connection is only available in Sweden and the Netherlands, and the bank card can only be issued in Sweden.
Parents who have kids aged 6 -18 can rely on the Nimbl app to train them on saving and spending their money. This mobile app comes with a prepaid debit Mastercard card. A parent can monitor their child's spending by receiving real-time notifications of card transactions via the app, and they can even restrict specific merchants, as with many other kids banking service providers. Although card purchases, top-ups, and ATM withdrawals are all free, Nimbl charges a monthly fee of £2.49 or £28 annually.
This kids banking-education option has a Visa prepaid debit card for customers. Kids can learn to save cash, donate money to charity, or invest it in stocks through this card. Unlike GoHenry, according to BusyKid’s terms and conditions, parents’ personal data are used to target in-app advertisements and may be shared with partners for the purpose of marketing. Fair enough, your child’s personal data will not be shared. This option is known to be highly affordable to parents. It comes with a free trial for one month, allows an unlimited number of kids, does not charge an ATM transaction fee, but requires parents to pay a low monthly fee of US$1.67.
Are Debit Cards for Kids Safe?
There are obvious safety and security risks linked with opening debit cards and online banking apps for your kids. You increase your child’s identity theft risk profile whenever you share any information about them online.
Countless accounts have been compromised following online data breaches. Sensitive information such as identification document numbers, phone numbers, credit card numbers, and addresses are usually exposed during such breaches.
In 2018, Javelin Strategy & Research conducted a survey and found that over one million kids were identity theft victims in 2017. The cost of this theft was US$2.67 billion, according to official estimates. Children below the age of 13 made up over 80% of the victims. This report shows how risky banking for kids could get.
Even the providers of banking apps for children sometimes sell personal data about your child to third parties. While some do this with your consent, many others do not. Only a few of them keep your kid’s data confidential and out of the reach of other companies.
While each debit card issuer is different, to register an account, you will need to share your personal data and that of your kid. Besides, debit cards for children are no riskier than those for adults. The most important factor to think about is how much information you are willing to share on the internet. You also need to be aware of how the card issuer handles users’ data by reading the company’s policy or terms and conditions for the account. It is a delicate balancing act to weigh the advantages and drawbacks of giving your youngster a debit card.
What Documentation Do You Need to Open a Debit Card for Kids and Teens?
The documents required to open a debit card for your child vary, depending on your location and the banking regulations or law. In general, you will need to provide valid documents that contain your formal name, date of birth, residential or permanent address, and similar information about your child(ren).
Examples of valid documents include your international passport, national identity card, driver’s licence, any other government-issued card, and any other document that might be requested by your card issuer or bank. Again, find out the correct list of required documents from your issuer and be willing to share such information with them before you sign up.
What Happens if My Child Loses a Debit Card?
Cards make it easier, safer, and more secure to handle money. Plus, using a card that is linked to a mobile app can provide additional account security. Unfortunately, without proper storage, care and consciousness while handling them, it is easy to lose them.
In the case of a lost card, you can use the app to lock your child’s card as soon as possible. In that way, you prevent unauthorised access to the money on it. After that, you can order a new card for free or pay a reissue fee.
It is the responsibility of parents to train their kids in the way they should go. You want to ensure that your children will be responsible adults and capable managers of their personal finance.
Registering an account with bank cards and app service providers such as GoHenry, Current, and Gimi can support you with preparing your kids for bigger financial decision making in the future. Although this kind of banking practice often comes with identity theft risks, there is little to worry about if you follow the right guidelines.