Credit Cards for Kids and Teens: What You Need to Know

One of the best ways to teach your kids about credit is to sign them up for one of the credit cards for kids that is available. The practical hands-on approach will give them experience managing their money, creating budgets, making payments, etc. And the best part is that these cards pose relatively little risk to your own personal finances. 

Of course, “credit card” is a bit of a misnomer. Most banks simply will not extend individual credit to anyone under 18. Instead, you’ll set your kids up with debit cards. These debit cards offer you control over things like spending limits, where they are allowed to use the card, etc. When used effectively (like having them make payments against what they have spent to restore their card balance) these debit cards are great tools to teach money management skills.

Best Debit Cards for Kids and Teens

Your own bank is probably going to be your first stop when trying to set up a debit card or “credit” card for your kids. But what if your bank doesn’t offer this product? Or what if you don’t like the way the program works? There are a lot of options out there. How do you choose which one is right for your family?

This is where research skills come in handy. Take some time to explore the different options that are available in your area. Check the cardholder agreements. Are there monthly or annual fees? Find out what kind of terms and conditions are associated with each card. Which banks back these cards? What do the reviews say? Here are some of our favorites to help you start your search.

Top Overall Pick: GoHenry Mastercard Debit Card

GoHenry is a trailblazer in the world of personal finance for kids, and not just because they used crowdfunding to get up and running. The app was created by parents to help parents. Their focus isn’t just to provide a receptacle for your kids’ allowance — any prepaid debit card can do that. GoHenry wants kids to actually learn from their app. 

Fees

The first month is free and then it’s $3.99 per month every month after that, for as long as you are a member.

Ratings/Reviews

Noteworthy features

GoHenry isn’t just a debit card that parents can fund and monitor. Obviously those features are there, but the team at GoHenry wanted their apps to actually help kids learn about money management. They do this via “money missions.” When your kids complete these missions they earn badges and points. 

The app/card also offer families the ability to set savings goals, offers real time spending notifications every time your kid uses their card, and a variety of parental controls — including the ability to lock the card. Another fun feature is that GoHenry allows you to customize each card with your child’s first name and an image based around one of their hobbies or interests, giving them a sense of ownership.

Other Top Debit Card Options for Kids 

While GoHenry is a favorite, it is far from the only option out there. Here are other choices if GoHenry isn’t quite what you want.

Greenlight Debit Card for Kids

Noteworthy Features

In addition to a spending account, kids earn interest on money they save. The app also teaches kids the basics of investing (if they want to explore that subject), has a financial literacy content library, and offers a cash back perk that deposits 1% of what kids spend into savings. You can customize each card with your kid’s photo.

Chase First Banking

Noteworthy Features

Chase also offers checking/spending accounts for teens over the age of 13. Everything can be monitored through the Chase app. In addition to a spending account, Chase also offers opportunities for saving and earning money—parents can set up specific tasks that are assigned a dollar value. As kids complete those tasks, the fee is deposited into their debit card account.

Copper Banking Teen Debit Card

Noteworthy Features

It’s FDIC insured, connects to parent’s bank account, offers rewards for referrals and can be used at ATMs.

Current Teen Banking

Noteworthy Features

Parents can block specific merchants, monitor spending and transfer money instantly. It’s FDIC insured. Teens can use their card to fill up the gas tank and if they don’t have enough to cover the cost, the balance will be debited from their parent’s account.

Jassby Virtual Debit Card

Noteworthy Features

The card includes financial literacy tools, rewards to use in the “Jassby Shop”, parental controls and has no monthly fees.

Famzoo Prepaid Debit Card

  • Fees: $5.99/month; membership covers every member of a family. $4.95 fee to reload a card using cash (via Greendot locations). $3 Card replacement fee.
  • Apple Store Rating: 4.6 of 5 stars
  • Google Play Store Rating: 4.8 of 5 stars
  • TrustPilot Rating: No reviews yet
  • Better Business Bureau Rating: Not listed

Noteworthy Features

Parents can lock/unlock a card as needed. The family billing plan can help parents show their kids how much bills, food, etc. actually costs.

BusyKid Visa Prepaid Spend Debit Card

Noteworthy Features

The card is FDIC insured and offers kids opportunities for earning, sharing, and saving money. Parents must approve spending choices. Parents can also get real time notifications for all activity on their kids’ accounts. 

Capital One Money

  • Fees: No fees for the account.
  • Apple Store Rating: 4.9 of 5 stars
  • Google Play Store Rating: 4.6 of 5 stars (Apple Store and Google Play reviews are for the central Capital One app rather than the teen account)
  • TrustPilot Rating: No ratings specifically for the teen account
  • Better Business Bureau Rating: No ratings specifically for the teen account

Noteworthy Features

This is available for kids aged 8 and up. The app allows kids and parents their own logins and offers a suite of parental control options. Capital One does prohibit use of the debit card at establishments aimed primarily at adults, like liquor stores, car rental services, cigar shops, brewpubs, etc. 

Mazoola Virtual Debit Card

Noteworthy Features

Privacy is a key feature here. Mazoola is compliant with COPPA (Children’s Online Privacy Protection Act). It also includes tools for teaching kids budgeting, saving, goal setting, and other financial topics. Parental controls are available. This is a virtual card only, no physical cards are issued.

Step Banking

Noteworthy Features

This includes credit-building features, parental controls and referral bonuses. It’s FDIC insured.

Cashola by Goalsetter

Noteworthy Features

Parents can set up rules and budgets about how their teens spend money. The card also offers financial literacy quizzes teens can use to earn more money.

Navy Federal GO Prepaid (formerly Navy Federal Visa Buxx)

Noteworthy Features

This card can only be opened by someone over 18, but additional account cardholders can be as young as 13. It’s good for parents who have multiple kids who are old enough to handle the card. 

Purewrist

Noteworthy Features

This isn’t technically an app for teens or kids, it’s wearable fintech that can be used by parents as a prepaid “card” to help monitor/fund allowances, teach good spending habits, etc. 

Bluebird

  • Fees: No monthly fee, $2.50 for out-of-network ATM withdrawals, $3.95 for cash reloads at such retailers as CVS Pharmacy, Walgreens, Duane Reade, Dollar General and participating 7-Eleven locations. Reloads at Walmart are free.
  • Apple Store Rating: 2.2 of 5 stars
  • Google Play Store Rating: 3.2 of 5 stars
  • TrustPilot Rating: 1.2 of 5 stars
  • Better Business Bureau Rating: Not rated yet

Noteworthy Features

This is not specifically an account/card for kids and teens, but since it is a prepaid card with subaccounts that you can reload, it can be an easy way to teach kids about financial responsibility. It’s accepted everywhere American Express is accepted, and can be reloaded for free at any Walmart. Bluebird also offers bank accounts.

Jelli

Noteworthy Features

Jelli offers FDIC insurance via Metropolitan Bank. The “jar” system allows users to save for several goals at once, making it a solid choice for older teens. 

Why Can’t Kids Have Credit Cards?

In order to open up a credit card account, you have to be able to legally sign a contract. In the United States, you must be eighteen before your signature will be considered legally binding. This is why it is possible for parents to add their younger kids to their existing credit card accounts but cannot open an account in their child’s name. 

Even if, say, your fourteen-year-old did have a legally binding signature, they likely wouldn’t meet the minimum criteria required by the credit card issuer. In addition to the ability to enter a contract, that criteria can include minimum independently earned income requirements, an existing credit score, some sort of credit history, etc. You can find out more by checking out the CARD act of 2009.

However, because your credit score doesn’t start at zero, it’s important that your teen establishes a baseline credit score. This will be a big help when your child needs to apply for a car loan, student loan or a credit card of his/her own. While starting out with no credit is not as bad as having bad credit, it’s a big advantage to start building a credit score early.

Even though it’s hard to set up credit cards for kids, it’s pretty easy to set your kids up with a debit card of their own. In fact, this is the safest way to teach your kids how to handle money and credit responsibly!

What is a Debit Card for Kids? 

A debit card for kids is a card that connects to an existing funding source. This can be your bank account, a bank account that you help them set up, or even a prepaid card that you fund and closely monitor. 

The card functions a lot like your debit card functions. The biggest difference is that the parents have more control over debit cards for kids. They can set spending limits. They can block stores or online shops. The list goes on.

Benefits of Debit Cards for Kids (and Young Adults)

The biggest benefit of setting up debit cards for your kids and teens, of course, is that it provides a tool to help kids understand — in a hands-on way — how money management works. Do you remember when your parents tried to teach you about spending by making you help them balance their checkbook? Setting your kids up with a debit card is a step up from that. 

The reason helping your parents balance their checkbook didn’t hit home is because you were still working with someone else’s money. And credit cards (and credit) offer many advantages in adulthood.

Sure, you might give your kids an allowance, but how often do you really think your kids will use cash as adults? Getting them into the practice of managing money with a debit card helps them understand how, even when money isn’t tangible, it is very easily spendable. It’s important to watch your numbers carefully! 

Want more information on no-fee debit cards for kids? Check out this video:

Why Can’t Kids Have Their Own Bank Account or Credit Card?

Like opening a credit card, setting up an independent bank account requires the ability to legally sign a contract. That age requirement is usually 18. In the meantime, you have a few other options.

Best Credit Card Option for Kids: Add Them as Authorized Users

You can add your kids or other family members as authorized users to one of your own credit card accounts. If it’s an account you don’t use regularly, you can ask to have your credit reallocated to a different card to keep the credit limit on the kids’ card low.

Other Options for Kids

Open a Sub-Account from Your Own Bank Account

Some banks allow account holders to set up “sub” accounts that piggyback off of their central accounts. These sub accounts can come with debit cards, and they are a great way to help your younger kids get used to the idea of managing their allowances. Just make sure that, if your child tries to spend more than they have that there are blocks in place to keep that transaction from going through!

Open a Joint Banking Account

Many banks allow people under the age of 18 to open their own bank accounts by having a parent or legal guardian act as a co-signer on the contract. Going this route means that you have joint control over the account. That does not mean, however, that you’ll have access to tools like setting spending limits, blocking merchants, etc. 

A joint account is a good idea for older teens who you trust to have at least a basic understanding of how money works. 

The other benefit to a joint account is that, once your child turns eighteen you can take your name off of the account and voila! Their first independent bank account is ready to go.

How Credit Cards Stack Up Against Prepaid Debit Cards

Unlike credit cards, prepaid and debit cards for kids do not require a credit score. They usually have no effect on your or your child’s credit score at all. This makes them safer because if your child messes up and spends too much, they can learn how to fix their mistakes without the prospect of having to deal with the fallout for years.

When your child is in high school and has more recurring payments like car payments, payments for streaming services, etc., finding a card that will report those on-time payments to the credit bureaus is a great way to help them begin building a top-notch credit score and payment history. 

Do Debit Cards Help Kids and Young Adults Build Credit?

There is one downside: with just a few exceptions, debit cards do not help young people build credit. They are still very useful tools, though! Debit cards can offer practical experience in:

  • Money management
  • Tracking one’s spending
  • Managing an account balance
  • Setting up and following a budget
  • The importance of avoiding fees and high interest rates on purchases

Tips to Teach Credit Use at a Young Age

American Express offers the following financial education tips to help your kids learn good money habits.

  • Go through their statements and talk about each purchase
  • Make sure they understand how interest rates and other fees work 
  • Teach them about credit card debt and how quickly it can add up
  • Teach them about prioritizing their spending. Using a color scheme works well. For example, using green for purchases that must be made (e.g., school supplies), yellow for purchases that would be nice but aren’t absolutely necessary (like new clothes for school or work), and red for purchases that you don’t actually need but only want to make (video games, toys, etc.)

American Express also recommends that, when they have proven that they can handle money responsibly, that you add your child to your credit card account. Adding them to your account will help them begin to establish their own credit score and history. This will come in handy later when applying for loans or other types of financing.

The Bottom Line

Your kids are never too young to start learning about financial responsibility. It’s easy enough to begin these lessons with a simple allowance payment each week. As your kids get older, however, it’s good to teach them about fees, interest rates, how to save money, budgeting for multiple things at the same time, investing, etc. Credit cards and debit cards for your kids allow you to teach them in a hands-on, practical way. That is, after all, how children learn best!

FAQs

Does Discover Offer a Debit Card for Kids?

While Discover does offer a checking account, it requires all account holders to be over the age of eighteen. They do not offer a debit card for kids at this time.

What is the Best Way to Start a Savings Account?

The best way to start a savings account is to open a savings account and stick to it. Your current bank likely has savings accounts that you can set up with just a few mouse clicks. If you’ve done that, and you want to ramp up your savings, you’ll have to do some research. Figure out exactly what you want from your savings — to earn a high interest rate, to be untouchable for a fixed number of years, etc. Then compare the different options that are available. Set up the amount you want to put in it to electronically deposit each week or month. It’s easier to build savings if the money goes directly into an account so you can’t spend it.

What are the Benefits of Building Credit at a Young Age?

The best way to start a savings account is to…open a savings account. Your current bank likely has savings accounts that you can set up with just a few mouse clicks. If you’ve done that, and you want to ramp up your savings, you’ll have to do some research. Figure out exactly what you want from your savings—to earn a high interest rate, to be untouchable for a fixed number of years, etc. Then compare the different options that are available. Savings will build quickly if you establish a set amount to be added to the account by direct deposit monthly or weekly. It’s harder to miss cash you never actually see.

Scroll to Top