This is a question most parents have. Technically, you can open a bank account in your child’s name when he reaches the minimum age required by the bank of your choice. So, it’s best to check with your local banks to find out what this age is. (Where we are, that’s 14 and free of charges.)
It’s never too early to set up a bank account for your child. In fact, a lot of parents open a separate account where they deposit the money their child receives, earns. So when is the right time for kids to have their own ATM Card (Automated Teller Machine card/debit card) ? It’s not a particular age that you are looking for. It’s the level of your child’s financial maturity. As a parent, you can gauge how your kid fare in the area of spending. Here are some points on how to prepare them about money matters, how debit cards will help them, and other key things to consider.
Educate Them On Money
As you give your child some financial education, you can start letting him decide what to do with his money. This should initially be done with your guidance. You will certainly know when he can manage his own money. In the meantime, you can retain control of your child’s bank account while “consulting” with him about everything you do to it.
Teaching them “needs versus wants” is a good way to make them see the value of money. What would become of the item bought after 6 months? Would he still be using it? Would there be any other things worth spending for?
Their debit card connected to a bank account can also serve as a savings account. It’s a way for them to have a feel of laying aside money for the future. Two of my kids have their own cards now, which proved convenient especially now that shops/stores prefer contactless payment in connection with Covid-19. They can easily access their accounts through mobile banking, which I also monitor from time to time. My kids are able to save up their commission fees, monetary gifts, and some of the allowance we give them monthly, they somehow learn how to value money properly.
The convenience of an ATM card cannot be discounted. You don’t even have to give him cash anymore because he can use his card to make purchases at various establishments. It’s most useful when you are not with him, and he suddenly has to spend on something (like a taxi ride home because of some inconvenience).
What you should be cautious of, however, is what he uses his ATM card for. But as mentioned above, teaching them to prioritize needs over wants is a good start.
Trust Your Child
Don’t make too much fuss about an ATM card or a debit card. Focus on teaching your child to make wise purchase decisions. When you succeed in doing this, you can be sure that he will not easily be tempted into spending his money on frivolities he does not need. But don’t be too strict with them, let them buy a gift for themselves, once in a while. Then, you can be confident that your child will keep his ATM card and use it responsibly.
Until you are sure that he can be trusted to handle his money wisely, you should not give your child his own ATM/debit card. As a compromise, perhaps you can open an account in his name, but keep the ATM card with you unless he needs it. During the times he uses his ATM card, you should be there with him to guide him through the process and maybe even to make sure that he is not withdrawing more than he should.
Most banks allow their users to limit on spending. This means there would be a certain threshold when withdrawing or using money won’t be allowed. This is just a safety net, as kids could be impulsive and might buy something out of the need to be in trend. Talk to your child about limits, and why it’s important to have restraint when it comes to money.
Right Time for Kids Having Their Own ATM Card
Different folks, different strokes – and that goes with parenthood too, and kids’ individuality. What works for one, may not work for the other, or what may work for one on a particular timeline may be far different from someone else’s.
Remember, kids having their own ATM Card, or debit card is not a matter of just age, but their maturity regarding money matters. No matter how rich you are, educating kids about money and saving up is beneficial.