Debit Cards for Minors

The question of whether or not debit cards for minors is a good idea is not the easiest one to answer. There are a lot of variables involved, primarily when you consider each individual household and the general attitudes and habits that are prevalent where money is concerned. As many of us are well aware, most of the time children will get their conceptions about money, perspective of money, and habits regarding money based on observing their parents’ financial behavior. So although the main question in most parents’ minds may seem to be “How do I know whether or not my son/daughter is responsible enough to handle having a debit card?”, there is also a self-evaluation that is necessary on the parents’ end to ask whether or not they have taught and modeled appropriate financial behavior to their children. Some of these dynamics are very hard to nail down, and I would never presume that I have all the answers to such a complex situation (nor would I ever think that I could solve it all in one hub—LOL), but as a general rule, a child’s understanding of financial responsibility is by and large a product of his/her parents’ actions (or inactions) regarding money. I remember talking with a woman about the type of things she observed growing up where handling money is concerned…she told me that she saw her parents literally get bills out of the mailbox and immediately just throw them in the trash can. She saw a level of financial irresponsibility demonstrated by her parents that left her with the impression that being financially sound & responsible is just simply not that important. She ended up carrying this into her young adult life, and sure enough, she would never reconcile her checkbook, never pay things on time, and even had a car repossessed. All because financial responsibility was not emphasized (and maybe even not brought up at all) in her household growing up. This created a sense of apathy about money that she carried into her adult life, and it took many years of “re-training” her mind to come to understand the importance of being financially solvent.

So as far as the “right” or “wrong” implications behind companies offering debit cards to minors, it’s somewhat in the same boat as other questions of “abuse of power”, such as gun control and so forth. A gun in the hand of a trained police officer can enforce security and peace, while that same gun in the hand of an unscrupulous criminal can kill someone. This applies in the realm of giving a teenager or a minor one of the most impactful forms of “power” that exists, and that’s purchasing power. On the legal side, some states require the parent to sign on as a joint owner of the account, and also to sign some fancy legal documents stating that they will be liable for any transactions performed by the minor. This is a common approach for parents whose children are away at school and need access to funds. It’s not uncommon to see this type of joint account ownership in many states, but the laws and finer legal points to vary from state to state. One major advantage is the fact that it is indeed a debit card, not a credit card, which means that funds have to actually be in the account for the minor to have access to them. This is a seemingly small but very significant distinction from a credit card, in which funds are basically loaned to the minor’s account, not extracted from the minor’s account, at the point of purchase. Many a parent has been shocked beyond belief when they have received their child’s credit card statement, so taking the debit card route is commonly seen to be a much better approach in improving a minor’s understanding of sound financial management. As far as specific debit cards are concerned, some examples of the more common cards available are the EspreeCard prepaid MasterCard or the prepaid Visa RushCard. In summary, as with every other major decision in life, before settling on whether debit cards for minors is a good approach or not, it’s always a good idea to do some thorough homework and make an informed decision.