What to Know Before Giving Your Kid a Debit Card

Teaching your child about money by giving them a piggy bank or having them earn an allowance by doing household chores is a great start to learning about how to earn and save money.

Spending wisely, however, is another lesson. And it will probably come away from home and without adult supervision.

A debit card—usually linked to a parent’s checking account—or a prepaid debit card can help children learn how to manage money jointly with their parents. Their spending can be monitored, such as through a phone app from their bank in a joint account that the parent puts money into only for this purpose.

Before giving their child a debit card, here are some things parents should know and discuss with their children:

Age limits: Most banks don’t allow minors to have a debit card in their own name until they’re 16. Some allow it at age 13, though a joint account with a parent may be best if a parent is trying to teach them good money habits.

Account features: Look for accounts that have low or no maintenance fees, online account monitoring, lots of ATM access, spending limits and text alerts for balances and large withdrawals.

Accounts aimed at teens: Some banks and credit unions have debit card accounts aimed at teens, offering free checking and other services.

USAA, for example, has a “Youth Spending” account with a debit card for children where parents can check spending online or on a mobile app. Teens 13 and older can access their accounts on apps. Parents can specify if their child can transfer money and make deposits, and can receive text messages if a spending limit is exceeded or an account balance is low.

The USAA plan has no monthly service fee, regardless of the balance. Overdraft protection can be tied to an existing USAA credit card or savings account.

No overdrafts: If possible, find an account that doesn’t allow the teen to spend more than is in the account. If there isn’t enough money to pay for a transaction, the debit card will be declined.

Link to a savings account: To encourage kids to save some of their money, their joint checking account can be linked to the child’s savings account. Before linking the two accounts, parents may want to make sure their child has the discipline to leave money in a savings account alone. If they can contribute to it regularly, they may be less inclined to pull money from it when they see something they want to buy but don’t have enough money for in their checking account.