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when to get a kid a debit card

If teens are going to be online shopping anyway, they might as well be doing it with their own money. (Photo: iStock)

Should you get your child a debit card? 4 things to consider

The average U.S. teen opens a checking account at 17. Experts say sooner is better.

With many kids working part-time jobs or doing chores for family, friends and neighbors to earn a few dollars, the question always comes up: When should your child open a bank account and potentially get a debit card?

Dean Brauer, president and co-founder of gohenry, has these tips for parents who want to help their kids learn to manage money:

Q&A: When to get a kid a debit card

Question: What are the pros of giving a child a debit card?

Answer: “Ensuring your kids have the tools to gain independence with managing a budget, learning to save, and making spending choices is a positive thing. It’s important to find a bank or financial app that offers all the tools they need to provide their children with this kind of independence but under the guidance of parents and with boundaries.”

Q: What are some of the advantages of introducing kids to banking products early on?

A: “With the right tools parents can nurture their children’s money confidence from a young age by helping them learn about the differences between their wants and needs, provide encouragement to take responsibility for earning their own money and making their own spending choices. Ultimately, the tool a parent chooses should help teach their kids to be smart with money.

“Kids are purchasing a lot on sites like Depop, Etsy or Roblox. Better to have them use their own debit card with spending limits than use a parents’ credit card. This will help them learn to make spending choices with their own money. With your credit card, expensive mistakes are just a touch away. They don’t view it as their money but rather just another item bought by the Bank of Mom or Dad.”

Q: What are some downsides or potential pitfalls to watch out for?
A: “It’s important that the right guardrails are in place around their spending and that parents are using these as tools to help teach their children about finances and good money management. With the right oversight and functionality, kids can limit their mistakes. We always say: Better a wasted $10 at 10 years old than $10,000 of debt when you go to college and get your first credit card.”

Q: When does it make sense to get your child a bank account?

A: “This is largely a decision by the parent about what is right for their family. Research shows kids can develop their attitudes and habits towards money as young as 7 years old, so between the ages of 7 and 13 is a great time to get started. In the U.S., the average age when a teen opens a checking account is 17 years old, just before they go off to college. I recommend starting younger than this. That way, kids can learn the fundamentals of managing money and can gain confidence within earning, saving and spending before they fly the nest.”

(Note: gohenry is a debit card and financial education app designed for kids and teens. Learn more here.)

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