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Should I Give My Kid a Debit Card?

If you’re a parent of a teenage child, you might already be assigning them household chores or yard work in exchange for an allowance. And if you earned an allowance when you were a kid, you probably got paid by your parents in cold, hard cash. But for today’s teens, times have changed. Today, cash isn’t king — plastic is.

older teen girl on laptop with debit card in hand

Why Consider a debit card for your teen?

We’re becoming a cashless society, with 3 in 10 Americans saying they don’t make any purchases using cash in an average week. Instead, Americans increasingly favor making purchases using debit cards, and that includes American teens.

If you’ve been debating whether or not to give your teenager a debit card, or if you’re wondering why your teen would want or need a debit card, consider the advantages, particularly when compared to cash.

A debit card usually comes with a standard checking account and offers a higher level of convenience and security compared to using traditional checks. A debit card can help your child understand the connections between earning money, spending that money, and appreciating the value of the goods or services they receive.

Speaking of goods and services, when you were a teen, you may have spent much of your time — and allowance money — at the mall. But these days, your teen most likely shops the same place you do: online. And the easiest way to buy something online? It’s definitely not with cash.

In 2020, 32% of online shoppers used a debit card most frequently to pay for their online purchases. Debit cards have now become the most common way we pay for things each month.
Something else to consider: Many businesses no longer accept cash payments, a trend that was hastened along by the 2020 pandemic.

The freedom to spend their money wherever they want is a great reason to give your teen a debit card. But there are other smart reasons for you to choose a debit card for your teen:
  • A debit card is safer to carry than cash. If your teen loses their wallet with cash in it, they’re out of luck. But lost or stolen debit cards can quickly be canceled and replaced.
  • A debit card can limit your teen’s ability to overspend. If you want to teach your child responsible spending habits, a debit card might be a great tool. Credit cards allow teens to charge as much as they want, whether or not they actually have the funds, which can lead to debt and bad money habits. With a debit card, the amount comes out at the time of purchase, so your teen is limited to spending what’s in their bank account, or if relevant, charged an overdraft fee for nonsufficient funds.
  • Your teen can avoid paying high bank fees. Although some checking accounts have fees associated, they’re usually significantly less than fees charged by most credit card companies. Avoiding late fees, annual fees and interest charges can save your teen a bundle of money.
If you’re questioning whether kids can even have debit cards, First National Bank and Trust’s answer is absolutely! Our Standard Personal Checking Account is ​​a low-cost account for 16-17 year olds with basic benefits, including a free debit card with rewards. With this account there are no monthly fees (with the electronic statement option) no minimum balance, and it requires just $25 to open an account. Teens also have access to free Online Banking and Mobile Banking tools to help them learn money management.
Still have questions about debit cards and how to select the right option for your teen? Let our banking professionals at First National Bank and Trust assist you. They can answer all your questions and help you make the right decision. Contact us or bring your teenager along when you stop by one of our convenient locations. For more information on financial milestones, read out Back To School Financial Checklist.