Giving your child a debit card can be an excellent way to teach them about money and budgeting early in life. With consumer debt in the US growing to over $14 trillion, according to CNBC and the Fed, any step you can take to help promote financial literacy early can go a long way.
However, not all debit cards for kids are created equal.
Some have higher monthly fees. Others are free but have ATM and card reload fees. And a few cards offer features above and beyond the competition.
It’s important to understand your options before choosing which debit card to get your kid, especially when it comes to cost. So below, we compiled a list of some of the best debit cards for kids, including a couple of free options you should consider.
What Debit Cards Can Teach Kids About Money
Building financial literacy is important at a young age so that kids get off on the right foot and start building their financial foundation. There are a lot of money lessons that kids can learn when using a debit card. Though, the one skill that they will likely pick up above everything else is budgeting.
By allotting them a predefined amount of money, you put the power in their hands to decide how they want to spend their cash.
Rather than saying they can purchase one toy when at the store or one candy bar when at the grocer, they have to look at each item’s price and decide what’s worth it and what’s not, just like the rest of us. They have to consider much more in terms of opportunity cost.
Plus, I think using plastic over cash can have some advantages. It’s like using training wheels before getting their first credit card. Plus, they’ll also learn the difference between a debit and credit card at an early age before they can get themselves into too much trouble.
With a kids’ debit card, you can put limits on how much they can spend. You can essentially make it impossible for them to overspend, and they might start to learn those boundaries.
Then, you take the training wheels off when they get their first credit card, and I think they’ll have a higher chance of not maxing out the credit limit right away because they have built the habit of sticking to a budget when using a card.
If we were following Dave Ramsey’s Baby Steps, teaching someone about money early would be like step 0. Although, he’d probably frown against the credit card training…
I digress. At the very least, giving your kid a debit card and talking about money will help promote financial literacy. Hopefully, that will go a long way in stopping them from contributing to that multi-trillion consumer debt number mentioned above.
What Defines a Kid Debit Card
Before diving into the list of the best kids’ debit cards, I wanted to define what a kid’s debit card is to me. Generally, I think it must comply with three rules:
- A kid (under the age of 18) must be able to use the card on their own
- The card must be accepted at most retailers and online
- There must be spending controls and parental controls, including transferring preset amounts to the card from a checking account
Also, there are usually features that allow you to track and monitor spending and manage chores.
Most of the best debit cards for kids are prepaid cards that you can load money onto. Since they are prepaid, you avoid the need to open a checking account and eliminate any possibility of overdrawing an account. The card being “prepaid” is the training wheels from the example above.
The 6 Best Kids Prepaid Debit Cards
Before diving into the list, I wanted to call out that the first two options are free! Meaning, there is no monthly fee associated with them.
The rest are still good options, and in some cases, better options, but there will be a monthly fee associated with them.
1. Akimbo Prepaid Mastercard
- Monthly Fee: $0
- Card Purchase Fee: $0 (first sub card free, after that $4.95)
- Reload Fee: $5.95
- ATM Fee: $1.98
The Akimbo prepaid debit card is technically free. However, even though there is no monthly or annual fee, there is a litany of other costs.
On top of the hefty $5.95 cash reload fee, there is also a $4.95 card replacement fee and a $5.95 inactivity fee (if your card is unused for 12 months).
I like the card because it’s free, and creating sub cards for your kids to use is relatively easy and only comes with a one-time fee of $4.95. Still, the other expenses associated with this card add up fast (especially the fee to transfer money onto the card).
Learn more about the Akimbo Prepaid Mastercard here.
2. Movo Digital Prepaid Visa Card
- Monthly Fee: $0
- Card Purchase Fee: $0
- Reload Fee: $0 (in most cases)
- ATM Fee: $2.00
The Movo card outshines Akimbo as a free debit card for kids in a few ways.
For one, there is no reload fee if you opt for direct deposit or other approved methods, which is head and shoulders above the Akimbo card. Imagine reloading $20 onto a card for a kid’s monthly allowance and having to pay $5.95. That’s over a 25% fee!
Even if you loaded $100 at a time, Akimbo is still taking nearly 6% from you.
With Movo, it’s free, which is a massive advantage if you plan to load small increments of money onto the card frequently.
However, there is a $4.95 inactivity fee that kicks in after only 90 days (compared to 12 months for Akimbo). If your kid is a good saver and doesn’t use their card often, you may face this fee from Movo. Like many other cards on the list, you have to watch out for ATM fees with this one as well.
Learn more about the Movo Virtual Visa Prepaid card here.
3. Current Visa Debit Card
- Monthly Fee: $3 ($36 billed annually)
- Card Purchase Fee: $0
- Reload Fee: $0
- ATM Fee: $0 (for in-network ATMs)
The Current card is not free, but it does offer transparent pricing and a one-month free trial. For only $36 a month, you add money to your card as many times as you’d like, worry-free.
Plus, Current offers more than just a debit card. They offer a mobile app with a whole suite of products, including teen banking. It’s one of the most technology-forward options on this list.
Also, for what’s it worth, the card looks cool and wins style points there.
Learn more about the Current Visa Debit Card here.
4. Famzoo Mastercard Reloadable Prepaid Card
- Monthly Fee: $5.99
- Card Purchase Fee: First four cards free, then $3 per card
- Reload Fee: Free when using a qualified bank transfer or direct deposit.
- ATM Fee: Varys by ATM
The FamZoo card is probably the most popular kids’ debit card option on this list. That’s because it was designed to be a kid’s debit card, whereas some other options on the list are just prepaid debit cards that happen to be good for kids.
Because the card is designed for kids, it offers a lot of neat features, including:
- Setting up payments for chores
- Monitoring and tracking kids spending
- The ability to set savings goals for your kids
The monthly fee is $5.99 per family – so the value gets better the more kids you have using the card. Plus, there are methods to reload your card for free to help keep costs down.
Learn more about the FamZoo prepaid debit card here.
5. Gohenry Prepaid Mastercard
- Monthly Fee: $3.99
- Card Purchase Fee: $0
- Reload Fee: $0 (when loading via debit card)
- ATM Fee: $1.50
Gohenry offers a free 30-day trial. After that, it is one of the more expensive cards on the list, coming in at $3.99 per month per child.
The premium price could be warranted depending on what you are looking for in a kid’s debit card. Gohenry is designed for kids, similar to FamZoo, and offers a sleek app intended to help teach kids about money.
Last, the ability to personalize the card is a nice touch and could help your kid get a little more excited about learning about money. However, it costs $4.95 to get a customized card.
Learn more about the Gohenry card here.
6. Greenlight Kids Debit Card
- Monthly Fee: $4.99
- Card Purchase Fee: $0
- Reload Fee: $0
- ATM Fee: $0
Rounding out the list is Greenlight, another card designed for kids.
In fact, their tagline is “the debit card for kids, managed by parents.”
The pricing is set up similar to FamZoo, where you pay $4.99 per month but can have multiple kids on the account. It also offers countless great features to promote financial responsibility for kids, including:
- Chore management
- Real-time transaction notifications
- Parent-paid interest on savings
- And more…
Learn more about the Greenlight card here.
Bonus: Open a Joint Checking Account
The bonus option on this list is to opt for a regular (non-prepaid) debit card.
You can do this by opening a joint checking account with your kid, giving them access to an FDIC-insured bank account and a debit card at the same time.
The two watch-outs with this option are:
- You need to make sure that you won’t get hit with any overdraft fees
- You need to check the minimum age to open a checking account, which can vary by bank
If you can get by those two hurdles, this could be a great option because it’s free. There are typically no monthly fees associated with checking accounts and debit cards, and you don’t have to worry about “reload” fees either.
Pros and Cons of Getting Your Kid a Debit Card
Kids Debit Card Pros
Teaches Kids to Budget: As mentioned at the beginning of this article, giving a kid a debit card can be one way to teach them about budgeting and enforce good money management practices.
You Can Set Spending Amounts: Most prepaid cards put the parent in the driver’s seat to set spending limits and monitor accounts. You can start to let your kids spend money on their own without completely letting them loose.
Avoid Overdraft Fees: Using a prepaid card, you eliminate the risk of having a kid overdraft a debit card and rack up hefty fees.
Multiple Other Features: From setting interest rates in “savings accounts” to incentivize savings to rewarding kids for doing chores, many of the best prepaid debit cards for kids come with additional useful features.
Kids Debit Card Cons
The Cost: There is no getting around it; whether it’s a monthly fee, reload fee, ATM withdrawals fee, or another type of fee, kids’ debit cards are expensive. The high price you have to pay takes away the risk of overdraft fees, and in some cases, the cost is offset with fun features to help you manage the card and teach your kid(s) about money at the same time.
No Rewards: Unlike traditional credit cards, most debit cards do not offer the ability to earn cash back or rewards.
Age Limits: The age limit to open a card tends to vary by company. This is another thing to keep in mind and look up before moving forward with a card.
How To Choose a Debit Card for Your Kid
Choosing a debit card for your kid is easy once you know your options.
In general, I think there are three questions you should answer to make the decision.
1. Do You Want a Prepaid Card?
If you want the safety and security that comes with loading money onto a prepaid card, then you have started to narrow down your options in the direction of the six cards listed above.
If you are okay with taking the risk of overdrafting an account or are familiar with a bank that stops overdrafting in the first place, going the route of a traditional debit card might be a good fit for you.
2. Do You Want Added Features?
If you want a card and app that comes with many bells and whistles, then opting for the FamZoo, Greenlight, or gohenry card (or something similar) is probably a good choice.
Each card’s website details exactly what it can and can’t do (such as monitoring spending). Before signing up, it’d be wise to read those details over carefully.
3. How Often Will You Reload the Card?
If you plan to reload the card monthly or even weekly, you’ll want to pay extra close attention to the reload fees and methods for reloading a card.
If you only plan to load up the card once a year, the monthly fee associated with the card is the cost you will want to keep lower.
Summary: Best Free Kids Debit Cards
Getting a debit card for your kid to use can be a great way to help teach them about money and budgeting.
Though it can also be a great way to simplify your finances, instead of doling out an allowance in cash, you can manage money digitally, just like most of us do when paying our own credit cards or monthly bills.
The key when choosing a card is to make sure the benefits outweigh the costs. As you saw reading through this list, these cards are not cheap, and the monthly costs and fees can add up quickly!
This article originally appeared on Wealth of Geeks and has been republished with permission.