A debit card for kids, teens, and college students definitely provide convenience for parents. Cash usage is dwindling as you probably already know and experience. Once you give your child a debit card, you no longer need cash on hand. No more dashing to ATMs or worrying about cash getting lost in a backpack abyss. The convenience, safety, and accountability of a debit card for kids vs cash are undeniable, but many parents don’t realize the other surprising benefits that come once your child starts using it.
1. Debit Cards Result in Kids Asking for Chores: A debit card for kids brings the concepts of earning and saving to light. Tracking account balances inspires kids to want to earn, especially when they have their own budget to manage. We talk to a lot of parents who say after signing up for a debit card, kids are the ones asking for chores to earn money towards savings goals that they create in the app. One parent said, “My kids have not stopped asking for chores. They love saving money and having control over purchasing what they want.” We also have many kids learning fiscal responsibility by setting savings goals for things like higher education, car insurance, vet expenses, and much more. In fact, the most popular savings goals amongst kids are for a car.
2. Debit Cards Can Teach Kids to Budget: Debit cards made specifically for kids provide an educational opportunity for parents to start contextualizing conversations about finances. Kids who make real-life trade-off decisions can realize the value of a dollar. By being in control of their money and spending, kids will naturally learn to budget and make smart financial decisions. One parent said, “Since my kids got their own cards, they are more cautious about what they buy because they have to work for that allowance.” When money is theirs rather than an endless stream from parents, kids learn to make smart trade-off decisions to delay gratification.
3. Debit Cards Are Good Preparation for Credit Cards: When kids turn 21, they are inundated with credit card offers and it’s important for kids to know how to use one. Credit card balances carried over from month-to-month have been growing every year in the U.S., most recently hitting $424 billion. Kids who have practiced being financially responsible are more likely to make smart decisions when it comes to credit cards and paying off debt. Financial literacy is also positively correlated with long-term wealth. A debit card can be the first step towards a healthy financial future. The sooner we teach our kids to be financially-smart, the better we’re preparing them for future financial decisions.
4. Debit Cards Can Rein In Online Purchases: Unlike when we were young, kids today make many purchases online whether it’s through online gaming, Amazon, or other online retailers. If your child is using your credit card you could wind up with a huge bill. A Greenlight debit card provides a great way to supervise kids, set boundaries, and protect parents’ credit cards. By giving your child a debit card, you can teach them to make better trade-off decisions when purchasing things like game extensions, while giving yourself more control and insight into how much they spend online each month.
Greenlight’s mission is to help parents raise financially-smart kids. The Greenlight debit card comes with a Greenlight app for both parents and kids. Parents can instantly send money to kids, turn the card off from the app if needed, and receive alerts whenever the card is used. They can automate allowance payments and manage chores so kids can learn to earn! These safe and secure experiences give parents the peace of mind they need to allow kids to manage their spending, saving, giving, and earning. Aside from cashless convenience, there are many more reasons to take advantage of this debit card for your kids. Give yourself the short-term benefits of convenience and your kids the long-term benefits of a financially-smart future.