Debit cards for kids are an essential financial tool that your kids will need to learn about, sooner rather than later. Plastic is a large part of our society, and the fastest way to rack up insurmountable debt when you become an adult (if kids are not prepared from an early age). That's why at Allowance Manager we believe PRACTICE MAKES PERFECT!
In fact, the reason why a debit card for kids is so important – is that it actively prevents your children from falling into the debt trap the minute they get their first card.
Nearly 60% of all Americans have at least $7000.00 worth of debt on their credit cards at any given time. If they had learnt about credit cards for kids, perhaps this wouldn’t be such a widespread problem. One thing is certain – no debt means greater financial security.
How Do You Teach Your Kids About Pre-Paid Debit Cards?
- Debit cards for kids should come with a set of rules. Define yours before handing over the card, and enforce them by reviewing your child’s account history at the end of every week.
- If you choose a pre-paid debit card for kids, keep in mind that these don’t build a credit history for your child. They are however, excellent practice cards for younger children, before moving onto credit cards for kids.
- All debit cards for kids should come with a set limit, or an amount each month. Make sure that your child knows this is all they have, and that it’s up to them to budget and spend or save the money wisely.
- The first few weeks they use their debit card explain how transactions work. Make sure that your child understands that every time they use their card, they’re not using imaginary money it's being deducted from the total they have available and that money can run out.
- Enforce the consequences of your child’s actions. If they’ve spent all of their allowance – there is no more money for them. Debit cards for kids will show your children that if they aren’t careful, they’ll be broke!
- When you bank for kids, it builds good faith with your banking institution. The same goes for using debit cards for kids. Over time, your child will be well versed in how our "plastic" society works. They will be primed and ready to transition into building a credit history, and once they come of age – will be able to finance a car, business or home.
Teaching your kids about money is about more than securing a debit card for kids, or making sure that they know how it all works. It’s about slowly trusting them to make their own financial decisions, based on the important lessons that they’ve learned about money.
Children are quite reactive, and if you guide them properly – they’ll figure out how to make sound, intelligent financial decisions using debit cards for kids. Just remember to keep guiding them, by revisiting their financial habits at the end of every week, or month.
Check out Allowance Manager Pro today which comes with a NEW Allowance Card. The time is now to empower your child to begin practicing managing money with a safe, kid friendly, prepaid debit card from Allowance Manager! They may be just kids today, but they need to make good financial decisions throughout their whole life as they get older!