Just three decades ago debit cards were a relatively new emerging convenience that both banks and their patrons benefitted from. Since the early 1990s debit card transactions have increased from hundreds of millions of transactions to hundreds of billions. Now, it’s not just adults who get to utilize the handy pieces of plastic, kids can now even get their own debit cards. According to CNET, the number of banking institutions offering debit cards to kids is on the rise and there is actually a good reason for it.
The number of available debit cards for kids (without a minimum age limit) has been steadily growing because of the pace at which societal culture is evolving, specifically as it pertains to technology. Technology has become an integral part of daily life – from online shopping to social media, to smart home devices and an insane dependence on our peripheral devices such as smartphones – technology has infiltrated every aspect of the way both individuals and societies function. Kids are growing up in this world. The age that children are being given their own devices, like cell phones, is getting increasingly younger. And chances are even if they don’t have their own devices yet they will most definitely have access to their parents’ devices.
In addition, this constantly evolving technically driven world has also become characterized by digital transactions. For instance, almost every app has an in-app purchase feature or function (most likely attached to a parent’s debit card) and these in-app microtransactions are even more common in what would attract a kid to a device most – games. Children are being exposed to needing to buy upgrades and the like in these games in order to progress further. Thus, it would make sense that parents would want to teach them about the value of money and how it works sooner rather than later. It creates an early learning opportunity to develop an essential life skill. Banks are thinking in the same vein, too, and trying to capitalize on the lesson by offering debit cards designed for kids.
As with anything, there are still concerns when considering giving a child a debit card, particularly when it comes to protecting a child’s data. Especially given that lawmakers and regulators are just beginning to sift through the uncharted territory of the digital age in order to implement laws and policies that serve to protect the exploitation of individuals’ data. However, if parents do their due diligence and vet the debit card options that they are considering for their child, then giving their child a debit card could have benefits that can set their child up for success later in life.
Some specific things to consider before going all-in on a debit card for one’s kid would be to make sure that one’s banking institution of choice adheres to the Children’s Online Privacy Protection Act, whether or not it comes with EMV chip protection for security purposes, and if monies on the account are insured by the FDIC in the event that the child loses the card. That being said parents can consider options like GoHenry, Busy Kid, Greenlight, Axos, and Step. All of which offer features that can help kids learn to save, budget, and manage their own money.