Financial Literacy and Parental Control: Some Basics of Debit Cards for Teens

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When are children old enough to learn about managing money? Most of those born after 2005 are digital natives, with tablets issued by schools, phones granted by parents and the expectation that any task can be accomplished online. Why not let technology help?

Money management apps are a useful tool to help you and your children communicate about finances and to teach them good spending habits, budgeting, saving, investing and giving. What you choose depends on the priorities you set for your family. Here are only a few of the apps with good recommendations.

It’s one of the most highly rated prepaid debit cards for children and teenagers due to its parental controls and flexibility. Kids and parents have companion apps with two different experiences. Parents can send money instantly, receive real-time alerts of kids’ spending activity, turn the card on or off from the app, put limits on spending, automate allowances, and more. Kids can track balances in Save, Earn, Invest, Spend and Give accounts, receive money from friends and family, manage their own budgets, set up direct deposit from their paychecks and more.

Greenlight comes with an EMV chip and parent-controlled PIN and uses several security features to help protect accounts from unauthorized access. Funds available through the Save, Earn, Give and Spend functionality are FDIC-insured through Community Federal Savings Bank. Pricing is $4.99 monthly per family.

In partnership with Mastercard, gohenry is a financial literacy app and debit card platform for kids 6 to 18. With parental controls for each child and no worry of overdrafts, it’s easy for kids to learn real-time financial literacy lessons.

Funds are maintained in an FDIC-insured account. Your child can use the linked Mastercard debit card that gohenry provides. Parents can set tasks and a payment amount for them, which children can check off as they go, recurring and one-time payments are easy to set up and send. The app provides real-time spending alerts; automated allowance, budgeting and spending limits, in-app card management and more features. Cost is $3.99 monthly per child up to four children.

A personal finance app that’s ideal for preschoolers through college, it’s good for parents. It can be a high-tech allowance system: you set chores and when they’re completed, you release money to their accounts. You can get prepaid debit cards, see the transactions your teen is making, and load money on the cards anytime. After a free trial period, the cost is $5.99 per month.

Designed to teach your children how to earn, save, spend and invest, BusyKid’s features include being able to assign chores and other tasks to your children. They get an account; you have an account. Your kids get automatic paydays each Friday, provided you verify on the app that the chores have been done, and kids can earn bonuses for extra chores they do. Cost is $14.95 annually per family.

Chase First Banking
The Chase Mobile® app is free for Chase customers with a qualifying Chase checking account and is available for those 6 to 17. It’s touted as one of the best free debit cards for teens that works anywhere Visa is accepted. Parents can set spend alerts and limits and specific locations in the app; approve or deny funding requests; set recurring allowance or one-time chore payments and receive activity alerts.

Capital One MONEY
Since Capital One acquired Hibernia National Bank and North Fork Bank in 2005, the credit card company has offered innovations. One is this free card that comes with no monthly fees, and parents do not need a Capital One account to qualify. Instead, they can link any external bank account to Capital One Money to fund the account.

The card has the expected parental control features such as activity alerts, spending limits and the ability to lock/unlock the card in the app. It’s also locked out of many retail locations that are considered to not be child friendly. The Capital One Money account earns 0.10% interest on all balance.

Buyer Beware
If you choose a fintech app such as Greenlight instead of a bank or credit union, make sure the company uses bank-grade encryption to keep your info secure. The industry standard for data encryption is 256-bit AES, or advanced encryption standard. Ensure that deposits are FDIC-insured for protection.

Children’s Online Privacy Protection Act compliance is enforced by the Federal Trade Commission and requires providers to disclose to parents what data is being collected. Each company’s policies regarding the collection of sensitive, personal data such as names, ages, email addresses, GPS location data, transaction information and more vary. Some reserve the right to share this personal information with ad and marketing vendors, insurance companies, collection agencies and other service providers through their privacy policies. Make sure you know what you agree to!

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