Debit Cards for Teens
by Leslie
I wish we had done this ages ago!
We took advantage several weeks ago of a free service from our bank (TD). We created child bank accounts for each of our teens (14 and 17) and gave them debit cards to access them.
Now, when they want money from their virtual family bank account at Active Allowance:
- they write us a check from their Active Allowance account.
- if it’s for more than just a small amount of cash, we log in to our real bank account with TD and do a transfer to theirs.
Now, they can pay retailers using their debit cards and not worry about losing their cash or being overdrawn.
I wish we had done that years ago for our 17 year old so she wouldn’t have had to carry so much cash when she went shopping (and sometimes lose it!).
Here’s a list of some of the main benefits:
- No need for older kids to carry a lot of cash when shopping
- No ability to overdraw/borrow
- No charge to get the debit card
- No charge to use it in stores
- No charge for ATM access, if from our bank’s ATM’s
- No need for us to have cash on hand when the kids want it
- Easy to immediately transfer money online from our account to theirs
- Online transfer safely relies on the bank’s mega-million dollar investment in online security
- transfers are free
All free for child accounts (free at our bank - yours may differ)! The only limitation for our bank’s debit card vs a credit card is their debit card doesn’t enable you to buy things online (some banks’ debit cards do work online).
Despite this one infrequent limitation, we vastly prefer debit cards over credit cards for our kids. One of the principles we’re trying to teach them, while we still have some influence, is that they “shouldn’t spend it unless they have it”. And that’s sure hard to do when they have a credit card (especially when I see how undisciplined our daughter can be with her cell phone account! I wish our cell phone company enabled us to create a limit, but that’s a rant for another day).
Oh….and one more thing…..it looks like some of our Teaching Kids Dollars & Sense lessons might be sinking in…at least with our 14 year old son! He deliberately doesn’t transfer too much into his real bank account. He’s a little concerned that if it’s too easily available to him, he might just spend it!
Sometimes, we wonder what lessons might be sinking in. It’s soooooo nice to enjoy those moments when we see some do!
Oh….and did I mention it’s all free 
May 5th, 2008 at 6:32 pm
Leslie,
I think it’s brilliant! A teen I’m close to just received her first credit card … and I had decidedly mixed feelings. Yes, it’s a good idea to teach them how to deal with money … but a credit card? when they’re not even earning their own keep? The free debit card almost achieves the same thing, but without the negative consequence of going into debt … and lots of benefits as you lay out.
I’ll be sure to pass this one on …:-)
May 21st, 2008 at 11:39 am
Leslie,
This is a brilliant idea. My teens seem to need cash without giving me notice. I don’t keep a cash reserve on me. Getting my girls their own debit cards could be a huge time saver for me. No more emergency runs to the ATM. Thank you once again. I appreciate the effect Active Allowance has had on our family.
May 26th, 2008 at 4:12 pm
Thanks Diana.
By the way, your comment was held up in a spam queue for the past few days and almost deleted. I just happened to notice it beore hitting the delete button!
There are about 100 spam comments for every real one so “false positives” are really hard to catch. If you’ve commented in some other blogs recently, you might find they also weren’t posted (many blogs use the same public anti-spam service called Akismet).
If you find this is still happening, let me know- I can contact Akismet for you.