May 1, 2021

Which bank card is the right one for your child? 

As we move to a more “cashless” society, it’s important to understand the many ways money can be spent without using cash. By teaching your child the differences between debit, prepaid, and credit cards, you are introducing them to money management and the importance of budgeting while making the right purchase choices. 

Teach By Example 

When making a purchase, explain why you’re using that particular card versus another. Let your child know how each type of card works, and include examples in everyday conversations. In this way, you kid will be prepared to use each type responsibly when it’s time.   

Debit Card 

The first card I introduced to my son was a debit card. He was in high school and needed a way to pay for expenses like nights out with friends. I didn’t feel comfortable letting him walk around with a lot of cash. Also, I could track his spending easily by looking at his bank statement. If he needed money, I’d transfer it into his account and he knew how much money he had to spend. 

Key Points

A debit card is attached to an account and you are using your own money to make purchases. It’s also easy to add money to the account when needed via online banking or a mobile banking app. 

Prepaid Card 

My son travelled to Europe on a school trip for World Youth Day. The prepaid card was easier to use internationally, and it allowed us to set a limit on what he could spend. Also, if he needed additional funds, we could easily add them to the card. 

Key Points

Parents can load a set amount on the card that limits how much a child can spend at any given time. Cards are purchased online. There are monthly associated fees, so shop around for the best and most convenient one for you. 

Credit Card 

Once my son went to college and understood the concepts of managing his (read: my) money, he needed flexibility to pay for unexpected expenses (car, apartment). Even though we discussed most of the purchases in advance, sometimes he needed access to more money than was in his checking account. 

Key Points

A credit card is a loan that must be paid back. If purchases are not paid for during a statement cycle, interest must be paid. And if payments are not made on time, then late fees are assessed, and so on.  

After establishing a savings and checking account, ensuring your kid knows how to use these cards is the next step on their journey to financial independence. All are excellent payment options when used correctly. And card usage is an easy way to start establishing credit. If you choose to get your child their own credit card, be sure to talk with your banker about establishing credit for them so the card is set up the right way.  

And keep talking with them about good money management techniques so they are prepared when they leave home. 


Robert Baer is a Vice President at Fidelity Bank. He coordinates Fidelity’s Financial Literacy initiative.

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