Post by SusanBAnthony on Mar 20, 2023 7:54:04 GMT -5
The college spending money post made me think about this.
DS (15) just went on a school trip for the first time and needed to bring money for meals for 3 days. We gave him a wad of cash and hoped he didn't lose it (he didn't). It made me realize we should probably figure out how to give him a credit card of some kind.
I don't really know what kind of CC makes sense. Not a debit card because I want the protection of a CC that his bank account won't get emptied out if he loses it.
We might use it for: emergency situation, food on school trip, paying himself for something we would cover (like going to grab groceries, or clothes we would pay for).
Do we get one of the cards marketed to kids? An authorized user on our CC with a fairly low limit? A visa gift card? How do people handle this stuff?
Post by midwestmama on Mar 20, 2023 8:00:52 GMT -5
This is a great question and I will be following to see what others say.
I remember when I was a teenager, my parents made me an authorized user on their card for buying gas and any emergencies. (If I was buying anything other than gas, I had to approve the purchase with my parents in advance.)
I agree with you, SusanBAnthony, on not wanting to use a debit card for the reason you mentioned. I seem to have issues with some places accepting Visa or MC gift cards (not sure why, they should be just like a gift card), so that would be my hesitation with that.
my parents got me a secured credit card from usaa when I was in HS to help me build credit. I still use it today! It had a small credit limit, I think $500, and I was to use it for one or two gas purchases a month and emergencies.
I also had my own bank account at that age and a debit card as well.
Post by wanderingback on Mar 20, 2023 8:04:57 GMT -5
I personally think the worry of a debit card is overblown. Yes fraud can happen but my bank is always easy to deal with and I assume he won’t have millions in there. A debit card is good to learn about budgeting. For a credit card I would either add him to one of yours that you don’t use much or get him his own. My parents got me one when I started driving to help me build my credit, also a checking account with an atm card.
Post by arehopsveggies on Mar 20, 2023 8:05:00 GMT -5
My parents gave us each a card on their credit accounts for these types of situations (and also when they wanted teenage kids to run their errands!). It really helped build my credit.
One weird thing to be aware of though- I have not had a card on that account in… 15 years? Maybe longer? And it still shows up on my credit report.
Post by penguingrrl on Mar 20, 2023 8:11:06 GMT -5
I gave my child access to my CC through Apple Pay, which most places take. We had to decide quickly because they were going to an amusement park with band and we found out very last minute that the park no longer accepted cash. When they start driving (not until 17 in NJ) I’ll likely make sure they have a physical CC or debit card because they’ll need it to get gas in most places. I’m not worried about a debit card for them, it won’t be linked to their bigger savings account and god forbid their account gets emptied it won’t trigger not making their rent payment or something as a teenager, which is the worry for an adult.
My kids have Capital One teen cards. They are debit cards but they don’t have enough money on them to worry about fraud and it is super easy to transfer money to their account. They also have no fees. They’ve had them for a couple of years now with no issues.
DS is going to Europe this summer so we do plan to add him as an authorized user on one of our credit cards in case he needs one on his trip.
Post by steamboat185 on Mar 20, 2023 8:13:51 GMT -5
I’d put him on as an authorized user. A debit card won’t help him with his credit history, but being an authorized user will. Edit I think some credit card companies will let you lower the credit limit for authorized users (I know Amex does).
My parents got me a Capital One Visa credit card with a low limit (maybe $500) when I started driving. They didn't want me driving without access to money. It was great. Helped me build credit, taught me to budget, etc. You know your kid and whether they'd treat it well.
I didn't get an ATM card until I went to college. It was one of the first stops we made at college orientation weekend. Before that I just had a bank book and deposit slips where I put my paychecks (I could not withdraw).
DD(14) just has a student checking account with a debit card through our credit union with DH and I as joint owners. Not super worried about fraud on that, our CU was very responsive the one time DH's debit card was compromised and we can freeze/cancel it through the app if it ever gets lost.
We'll probably go the route of making her an authorized user on one of our credit cards when she starts driving or goes to college, whichever comes first, or possibly cosign a low-limit card with her.
My DD is the same age and has plans for an European trip this summer. So, we investigated a card for that and everyday credit charges. As a minor, she needs to be on an adult account. So, she has her own account, at our bank, with my name - that account has a debit card. We put a few hundred dollars on that account/card. When we got into the details, we discovered that a card with a Visa/Mastercard logo would require a separate application. So, she also has a bank issued credit card linked to that account (also with my name) - that card has her name on it. We can track purchases through the app and online.
DD has always had an account (also with my name) at the credit bureau where she saves her money.
Now that that’s all set up, I think I should have just added her to my Capital One credit card as an authorized user - and gotten her own card with her name on it.
My soon to be 15 year old has a debit card with his bank account. He also has a PayPal account linked to my credit card which has surprisingly come in handy multiple times.
I just saw a video talking about adding your kid to your own card to help build credit. Assuming that you have good credit yourself, this seems to build better credit than getting a kid their own card.
If you don't have good credit, it may be better to find something that doesn't link your kids credit to yours.
My kids each have a debit card through Capital One 360. I can see it all and lock it if need be (like when DS lost it). I get the fear of it being drained (I don’t use debit cards) but you can keep an eye on it daily and maybe add a small amount each day? This is, of course assuming you bank with them… I think it’s a teen product but mine are 10 and 12.
If I truly wanted a CC option, I’d add them as an AU to one of my cards and set a limit for them. I know you can do that with business cards, not sure about personal (never needed to ask).
I personally think the worry of a debit card is overblown. Yes fraud can happen but my bank is always easy to deal with and I assume he won’t have millions in there. A debit card is good to learn about budgeting. For a credit card I would either add him to one of yours that you don’t use much or get him his own. My parents got me one when I started driving to help me build my credit, also a checking account with an atm card.
completely agree! I've had my debit card compromised and never had an issue getting my money back.
The biggest issue with debit vs credit is that if you *need* the funds for bills or emergencies you might not have it asap. That is less of an issue with a cc, unless the fraudenlent charges max out your limit (which is totally possible too).
I personally think the worry of a debit card is overblown. Yes fraud can happen but my bank is always easy to deal with and I assume he won’t have millions in there. A debit card is good to learn about budgeting. For a credit card I would either add him to one of yours that you don’t use much or get him his own. My parents got me one when I started driving to help me build my credit, also a checking account with an atm card.
completely agree! I've had my debit card compromised and never had an issue getting my money back.
The biggest issue with debit vs credit is that if you *need* the funds for bills or emergencies you might not have it asap. That is less of an issue with a cc, unless the fraudenlent charges max out your limit (which is totally possible too).
Agree on this. Although, I've had banks reverse fraudulent charges on a debit card literally while on the phone with them. While fraud on a credit card took a couple weeks to refund.
I feel like around this age my mom started a checking/savings for me at our local credit union. I then got a low limit credit card with that same bank.
I personally think the worry of a debit card is overblown. Yes fraud can happen but my bank is always easy to deal with and I assume he won’t have millions in there. A debit card is good to learn about budgeting. For a credit card I would either add him to one of yours that you don’t use much or get him his own. My parents got me one when I started driving to help me build my credit, also a checking account with an atm card.
completely agree! I've had my debit card compromised and never had an issue getting my money back.
The biggest issue with debit vs credit is that if you *need* the funds for bills or emergencies you might not have it asap. That is less of an issue with a cc, unless the fraudenlent charges max out your limit (which is totally possible too).
I think that is the big thing for me. When we’ve needed money for emergencies it hasn’t been like 50 bucks it’s been a few hundred per person. If I’m a teenager and already stressed am I going to remember to move money from my savings to my checking? If you need an extra hotel because your flight is canceled it’s the cost of the room plus whatever hold they put on the card. Even gas stations will often put a temporary hold of 100 dollars or more, which can have you go negative for a bit assuming you keep a few hundred for emergencies.
Post by InBetweenDays on Mar 20, 2023 9:08:42 GMT -5
Our 16yo daughter has a Chase teen checking account that is tied to our bank account that she's had for a few years. She can't access our funds, but we can transfer money into her account She then has a debit card associated with that and it is easy for us to move funds into her account as needed.
ETA: I will add having a debit rather than a credit has been great for her to really learn to budget her money since she has a limited amount and knows what that limit is. She also knows now how to deposit checks she gets and set up payment systems when she gets paid through other online sites (she refs and gets paid through their website or Venmo).
ETA 2: As others have said most debit cards these days are insured against fraudulent use. I *think* all are if they have the visa symbol on them. I know all of our debit cards are so we are not responsible for any fraudulent charges.
Our 14 year old has a checking account with a debit card. We load their allowance in there (and they earn a ton in a summer job as well, half of which they get to keep for spending, the other half of which goes to their college fund).
If they lose it, they suffer the consequences. So they're learning to keep track of it. They have ADHD and quite a few purses, so that's a challenge; we're constantly helping them track it down. But I think it's a fairly low-risk way to prepare them for living on their own.
ETA: Personally, I do *not* want them attached to my checking account or my credit cards. I want them to learn that their money is separate from ours. They are ready to start thinking and acting independently, and this is one tool to nudge them further in that direction. I also don't want my much larger pool of funds put in jeopardy.
Our kids both have their own checking accounts and associated debit cards. I think since my daughter was 10 and my son 6. (They're 13 and 9 now). We keep the cards and then give them to them for specific events/purchases. And if we've "given" our oldest money for something we do it by putting money into her account. I also always make her carry a $20 because old habits die hard.
Their accounts are linked to ours for overdraft protection. They deposit all their birthday money, etc in there. Less anything they want to donate (they like donating to the shelter where we got our cats).
My son has amassed about $500 from God only knows where. My daughter has about $150. They've never been hacked, gone over budget, etc.
Eta: She hasn't yet asked to just keep her card all the time. When she does, we'll say yes.
Post by gretchenindisguise on Mar 20, 2023 9:27:03 GMT -5
We got both kids Greenlight Cards and have been really really happy with them. I can finally stay on top of allowance, because it's automatic. I can see exactly what they buy, when they buy it. We have a savings, giving, spending and investing categories. The kids got to choose the stocks they wanted to buy and we watch them grow/fall. It also has cell phone protection, so we were able to reduce that from our verizon bill for L's phone.
My parents made me an authorized user on their credit card and insisted I keep their card in case of an emergency long into my young adulthood even after I had ample access to credit in my own name. I don’t know what kind of emergency my dad was worried about but it never kept me from learning to be responsible with my own finances.
Post by SusanBAnthony on Mar 20, 2023 9:32:18 GMT -5
Thanks all! I'm now leaning towards both getting an authorized user card for him that he won't have all the time (only as needed) and a debit card that is his to manage. I need to figure out which of our CC's have the best option and also if our bank (Huntington in case anyone knows) has kid/teen specific accounts or what.
Both of my teens work, so they have checking and savings accounts along with a Visa Debit card. On top of that they are both authorized users on my Amex but have to approve any of those purchases ahead of time with me.
Thanks all! I'm now leaning towards both getting an authorized user card for him that he won't have all the time (only as needed) and a debit card that is his to manage. I need to figure out which of our CC's have the best option and also if our bank (Huntington in case anyone knows) has kid/teen specific accounts or what.
That seems like a great option. One he can self manage and one option in case of emergency.
My son has both a debit card for his own checking account since he works and a credit card. I added him as an authorized user to my oldest card which I've had for over 20 years. I do make him keep the CC on him in case of emergencies though, especially once he gets his license in May.
David has an Apple Card that has his name on it, but it piggybacks off of our account. He doesn't use the physical card, he Apple pays with his phone or watch. It's super handy and he earns his own cash back on it.
eta: Your child has to be 13 for the Apple Card (which is a Master Card). I'm not sure if that's a law or Apple rule.
Our 14 year old has a checking account with a debit card. We load their allowance in there (and they earn a ton in a summer job as well, half of which they get to keep for spending, the other half of which goes to their college fund).
If they lose it, they suffer the consequences. So they're learning to keep track of it. They have ADHD and quite a few purses, so that's a challenge; we're constantly helping them track it down. But I think it's a fairly low-risk way to prepare them for living on their own.
ETA: Personally, I do *not* want them attached to my checking account or my credit cards. I want them to learn that their money is separate from ours. They are ready to start thinking and acting independently, and this is one tool to nudge them further in that direction. I also don't want my much larger pool of funds put in jeopardy.
I feel this way too. My children each got their own debit cards with a checking account early — one was maybe 9 and one was 11. I wanted them to learn how to manage plastic money and to be forced to understand that there’s a limit to what you can spent.
That said, if I wanted to get them a credit card like OP does, I’d start with my bank or credit union to see if they have a product aimed at teens. We use USAA.
I am getting my 15 year old a debit card this week. The budgeting aspect is why I decided to go that route. He has a checking account, but we have access to it so we can see if he is about to overdraw or whatever.
Good idea about adding them to a CC to establish credit.
I personally think the worry of a debit card is overblown. Yes fraud can happen but my bank is always easy to deal with and I assume he won’t have millions in there. A debit card is good to learn about budgeting. For a credit card I would either add him to one of yours that you don’t use much or get him his own. My parents got me one when I started driving to help me build my credit, also a checking account with an atm card.
completely agree! I've had my debit card compromised and never had an issue getting my money back.
The biggest issue with debit vs credit is that if you *need* the funds for bills or emergencies you might not have it asap. That is less of an issue with a cc, unless the fraudenlent charges max out your limit (which is totally possible too).
My bank refunds the money immediately so thankfully don’t have to worry about that. Since OP is talking about a teen that seems like she’s involved in their lives I can’t imagine that they’d be in a dire emergency situation if their card was compromised. I think it’s important for young people to learn how to budget with a checking account/debit card, then can add on responsible credit card usage.