Kids' Bank Cards: How Do They Work?

Kids’ bank cards are available as a debit card through a children’s bank account or as a children’s prepaid card.

Ruth Jackson-Kirby Published on 07 December 2020. Last updated on 20 January 2021.
Kids' Bank Cards: How Do They Work?

If you’d rather your child didn’t carry cash, a kid’s bank card or spending card could be a good solution. You can also use them to start teaching them basic budgeting skills.

What are kids' bank cards?

You have two options for getting a card for your child. The first is to open a children’s bank account that comes with a debit card. This allows your child to withdraw cash from their account at an ATM, and they may also be able to use the card to buy things in shops and online.

The second option is a children’s prepaid card. This card isn’t attached to a bank account. Instead, you pre-load it with money that your child can then spend in stores and online or withdraw from an ATM.

Pros and cons of kids' bank cards

There are several significant benefits to giving your child a card, but there are some drawbacks that you should be aware of too.

Pros

  • Learn about budgeting. Pay your child a monthly allowance and explain to them that the money has to last them for the next four weeks.
  • Avoid carrying cash. For example, if your child is going away on a school trip, a card means they don't have to carry large amounts of cash.
  • Security. If your child loses their card, you can deactivate it to protect the money. You can’t do this with cash.
  • Control. By checking their statements, or checking the app linked to a prepaid card, you can see how your child is spending their money.

Cons

  • Easy spending. If you gave your child a bank card tied to the account their savings are in, they could blow their savings. It might be advisable to have a separate children’s savings account that they cannot access so easily.
  • Monthly fees. Most prepaid cards come with monthly or annual fees. You’ll need to compare these if choosing a prepaid card.
  • ATM fees. Watch out for cards that charge a fee for cash withdrawals.

Children’s debit cards vs children’s prepaid cards

There are benefits to both debit cards and prepaid cards. Which is best for you will depend on your individual needs. A debit card is attached to a bank, and can be a great starting point for your child before they get their first current account. A debit card is also free.

One drawback to a bank account is parents can’t keep as close an eye on their child’s spending. You could have the login details and check online or check postal statements, but a prepaid card gives you much more oversight and control.

With a prepaid card you can limit their spending and block the card from being used in certain retailers. You can also get instant alerts when they use their card. A downside? Prepaid cards come with a monthly or annual fee.

Because of the increased control with prepaid cards, they could be better suited for younger children, with bank accounts and debit cards reserved for teenagers who may be earning their own money and ready for more financial independence.

» MORE: 7 great ways to teach kids about money

How to get a kids’ bank card

If you want to get your child a debit card attached to a bank account, read our guide to children’s bank accounts to find the best option for your family.

If you prefer a prepaid card, you'll want to shop around and then apply either online or via an app. Some are all-purpose prepaid cards, which many adults use for help with budgeting or to take overseas, while others are specifically designed for children and young people, with features to help their parents monitor and control spending.

What happens to the card when my child turns 18?

If you have a bank account with a debit card, then the account likely will be converted into the bank’s adult current account.

With children’s prepaid cards, it depends on the provider. They won’t be changed into an adult version, as most don’t have an adult account. Instead, you may be able to use the card until it expires.

About the author:

Ruth is a freelance journalist with 15 years of experience writing for national newspapers, magazines and websites. Specialising in savings, investments, pensions and property. Read more

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