Debit cards are a quick and easy method for accessing cash. As the debit card craze has blanketed the country, more people now use them as a form of payment than use cash. Although debit cards are generally issued only to those who are of legal age, minors can also obtain them in some circumstances.
Traditional Bank Accounts
The most common way to get a debit card is by opening a current account at a bank or credit union. Because signed contracts are required when opening current accounts, however, most states prohibit minors from being sole account owners.
Parents, or other adults of legal age, can open bank accounts in their own names and authorise minors to use their debit cards to access account funds.
In this type of arrangement, the adults are liable for all charges made by the child, including any resulting bank fees. Because minors are not account owners, however, they are prohibited from signing checks, making withdrawals at the bank and obtaining account balances.
Children as Joint Owners
Because children generally cannot be sole owners of bank accounts, adults may consider opening a joint account in order for a child to obtain a debit card. As a joint owner, a minor can have a debit card issued in his own name, sign checks, make teller withdrawals, and request balance and transaction information.
Parents and children are jointly liable for all transactions made on the account and any resulting fees.
Prepaid Debit Cards
As an alternative to opening bank accounts, prepaid debit cards allow parents to control their child's spending without fear. Prepaid debit cards are not attached to bank accounts. Instead, they function more like re-loadable gift cards.
How Prepaid Debit Cards Work
Prepaid debit cards are funded with a particular amount of money to establish the spending limit. People can then use the cards wherever traditional debit cards are accepted until the balance is exhausted. At that time, the card is unable to be used until more money is added to the balance.
As their popularity has drastically increased, there are several prepaid debit card choices available.
Visa Buxx Cards
A popular option, the Visa Buxx card is a prepaid debit card that is issued by several financial institutions throughout the country. It is designed for children ages 13 and up. Parents can load the card with electronic funds transfers from their bank account, and teens can use the card wherever Visa is accepted.
Balances and transactions can be viewed online. Financial education information and quizzes are also available with each card. Personal identification numbers (PINs) can even be issued with the cards so they can be used for cash withdrawals at ATMs.
There are several ways in which children can obtain debit cards. Parents must evaluate their child's maturity level and amount of financial knowledge in order to choose the proper debit card option.