How to Get a Credit Card for Kids: 7 Questions that Will Help You Start 

Credit card for kids is a complex topic for many. Numerous questions are dancing around the parent’s heads. Unfortunately, these questions often appear alongside the images of their child running rampant with their credit card account. Many children do not understand the benefits of having a credit card, and many parents do not want their kids to have one. However, there are substitute choices on the market, for example, prepaid debit cards for kids. 

As a parent, educating your children about credit cards is a good idea. Children often learn about credit cards and how to use them from their parents. Credit cards give kids a chance to learn about the value of money and how to manage their funds. It is an opportunity for them to start learning early and preparing themselves financially for the future. 

In a world where people are becoming increasingly aware of the importance of financial education for children, giving your child a credit card at such a young age can seem daunting. With so many options available in the market, it’s hard to find the right one. But thanks to digital innovation and technology, managing this process is more accessible. This article will guide you on how to get a credit card for kids and the best choices for prepaid debit cards for kids.

#1 At What Age Can I Put Child on My Credit Card?

By default, minors cannot have a credit card or account in their name. They can open an account in their name when they turn 18. However, most banks allow an underage person (including a ten-year-old) to be an authorized user of their parent’s credit card. 

So, what exactly is an authorized user? It’s simple. An authorized user is someone who can charge a credit card account. Depending on the credit card, they may get the same privileges as the principal cardholder. However, there is a clause that the authorized user is not responsible for the debt. The entire obligation falls on the primary cardholder. 

When you add a kid as an authorized user, you must understand what you consent to. Parents incorrectly believe that because they were primary account holders, they would not be held entirely accountable for charges made by authorized users.

In essence, if you open a new account and add your child as an authorized user, they can use the funds, but they are not responsible for the debt. That means you could end up with a huge debt you cannot pay and hurt your credit score.

An authorized user is often confused with a joint account, which is an account that two or more people share, only, in this case, all of the owners share responsibility for the debt. Although none of the account holders can be removed from the debt while regarding an authorized user, you can remove that person at any time. Before you decide on a credit card, check the age requirements, as some companies may require a child to be over 13 years old. 

#2 Is it a Good Idea to Put a Child on my Credit Card?

It depends on your final goal, your child’s age, and their responsibility toward the money. While many parents consider the notion purely to help their kids build a credit score, others attempt to teach their kids financial literacy and money management. 

It is always good to start teaching your kids about how money works at a young age. Many parents teach their kids about money, and the final step is giving them access to a credit card. Many parents assist their children in obtaining their first credit card so that they can develop credit. While establishing a credit history for your child is a legitimate reason for taking this step, it is far from the most important. 

The time someone has utilized credit is only a modest component in establishing their credit score. Far more crucial is kids’ payment history, precisely how frequently they have or have not paid their obligations on time. 

If your child cannot pay at least the monthly minimum on time, do not give them their credit card. However, some responsible kids spend it on grocery stores and understand that a credit card is not a wishing well. 

But, we live in an online world, where almost everything is available if you have an Internet connection. You might not see it, but a credit card is a piece of plastic that gives money for anything you want. That might be great when you are short on funds and have an urgent matter. Yet, in the end, someone has to pay that debt. 

Children might perceive this as not a big deal, yet they don’t understand the gravity of the situation. The truth is your child may have shown responsibility towards money management, but do you know that they won’t spend more than they can pay? Hence, make sure they understand the concept, and you are sure you are acquainted with risks.

Why? Simply because if they spend more than you can return, you end up with a hefty bill in your hands or even damage your credit score. 

#3 How Do I Know My Child Is Ready for a Credit Card?

The truth is only a parent knows their child. But, some simple giveaways can help you determine whether your kid is ready for a credit card. 

You don’t have to spend ages describing the concept of a credit card for kids. They only need to know the basics and the consequences of misusing it. Moreover, their experience with cash and debit cards might be an excellent overture to being responsible with their newfound purchasing power. Finally, if your child understands how their actions can affect your credit score and what that means, they might be ready for the real thing. 

You can make a test case. For example, you are sitting at the table and agreeing to allow them a certain amount of money from your funds. First, arrange the reimbursement conditions, such as either they pay the bill themselves or they give you the money for it. Next, specify the stores and things they can buy with that money. For example:

– the card is used only to make small purchases so that you don’t have to carry cash at all times. 

– the card is only used when you know your child can afford it, and they do not borrow or spend more than they can afford.

Finally, set the consequences if they break that agreement, including overspending or missing a payment. If they cannot follow the rules or fail to meet the requirements, it may be better if you wait a little longer to provide them with credit card access. 

There are a lot of benefits if your child learns to deal with finances at a young age. However, there are certain cases you must have read or heard about children spending too much on trivial things. The truth is giving a piece of plastic to your child is a good idea only if you are sure they understand what it means. Unfortunately, many parents hurriedly give their children access to credit accounts without explaining the basics. No child is doing it intentionally, but they might not understand the difficult situation the fund’s abuse can bring.

#4 What are the Risk Factors of Giving a Credit Card for Kids?

Every parent wishes the best for their kids. But, you must be aware of the risk factors should anything go wrong. So, before even considering adding your child to your credit card, make sure to make that awkward conversation at the table explaining everything about the credit card and its responsible usage. 

There is no right or wrong to this, and the decision is entirely up to you. However, before committing to anything, you must be aware of the risk factors of giving your child access to your credit card. 

Their Charges – Your Responsibility

Any purchase made by the authorized user is considered to be your responsibility as the primary cardholder. That means you should reconsider giving them access to a card if you are unsure if they understand cause and effect when making a purchase.

Although many kids seemingly understand the concept, some may succumb to temptation as children often do. That includes making a wrong choice about the purchase. Even with rules, your kid might be dazzled with something online, swipe the card, and create bills you can not afford. 

Suppose you think reporting fraudulent or unauthorized charges is not going to work. Any purchase made by you or your authorized user is still your responsibility. If you still opt to allow your kid a credit card make sure to monitor their spending frequently. 

It Affects Your Credit Score and Theirs

Parents choose to get their children a credit card to teach money management. But, if they don’t understand the concept in the first place, they will grow up to be adults living in debt. That is not a minor feature. Knowing the risks of giving your child a credit card and how it can hurt their future is essential.

Some credit card companies charge fees for authorized users. So if you are using this as a lesson, it’s better to opt for other ways that are less harmful to your credit score. But if you opt for this solution to build your credit score, the bank will ask for your kids’ information. In that case, all the information will go onto their credit report. It’s an excellent way to jump-start in life, but make sure to understand the terms of use fully. 

By default, each authorized user is the responsibility of the cardholder. Therefore, any charges your child made with their credit card are your debt. In other words, consider that any negative marks on your credit account affect your credit score and the authorized user in the future. 

Unexpected things happen in life, and you might be in a bad situation and forced to use that account. If you do not want your child to be affected by your score, remove them as authorized users to protect their credit history. 

The bottom line is that parents should be careful about how much control they want over their children’s finances and their children’s responsibilities when giving them a credit card.

#5 What are the Benefits of Giving Credit Card for Kids?

Suppose you are still debating the thought of adding your child to your credit account, then apart from risks, you must consider benefits also. On the one hand, a credit card for kids can give them the freedom to experience the natural world and learn what responsibility means. On the other hand, they should be used responsibly and not as a form of entertainment or convenience. Of course, it all depends on your child and the knowledge you transfer about the matter. Yet, there are a few reasons why giving your child a credit card can benefit them in the future. 

• Building Credit Score

It’s a known fact that most people lack funds to rent an apartment, for example. When you look at it, some of life’s necessities depend on your credit score. That is why most parents think ahead about their child’s future. Perhaps building a good credit score is one of the main reasons why a credit card for kids are mentioned online in the first place. 

If you are a responsible parent and have good credit standing, your kid can transfer this positive rank to their future account if they are authorized users on your credit card. We all know that a sound credit file can get better offers on loans and mortgages. So, having a solid payment history and a low credit utilization rate can help your child’s credit score. Let us not forget that you also have benefits, such as points for every dollar spent on an authorized user card. 

• Teaching Financial Responsibility

The most notable benefit is perhaps teaching your kids about financial literacy. That means that your kids can become more responsible with their spending habits in the future. But, naturally, before you jump on the train to open a credit card in your child’s name, it would be wise to teach them first about what the credit card is all about. This way, they will know how to use credit cards properly and not fall into debt so they can make wise decisions in the future.

Authorized users can make changes to the primary cardholder’s credit card. In simple terms, it can help them pay off charges each month without interest if appropriately managed with oversight from a parent. In addition, you can use the authorized credit card to teach them how to use their credit responsibly. For example, setting a limit and holding your child accountable for spending their money, making timely payments, and spending only what they can afford to pay back. 

• Access Emergency Funds

There is always an unpredicted moment when we find ourselves in inconvenient situations. Sometimes, having money in your pocket can save you from hopeless situations. For instance, a car gets broken down in the middle of nowhere. Without funds, you cannot call a tow truck or a taxi. So a credit card might be handy, especially for teens, where most service providers will not accept the parent’s card number over the phone. 

How to Teach Your Kids About Credit Cards

Credit cards are a standard tool in modern life. But, the truth is that a credit card for kids is something that parents teach their kids. Sure, some cases of children abusing their parents’ credit card numbers without their knowledge. 

But, imagine if your child doesn’t know the basics, it is more likely that the moment they turn 18, they will open an account and fall victim to debt. It’s a two-edged sword; whichever you choose, there is always one regret. 

Instead, teach your child the basics of money from a young age. For example, explaining how it came to be, what it is for, and how to manage it to get what they need or want. Make a precise point on the difference between needing and wanting things and how that may impact them in the future.

There are numerous resources on how to teach a child about money, spending, and saving. After they master the basics, you can move on to more serious things, such as debit cards and credit cards. 

The most crucial thing while teaching the concept of a credit card for kids is to explain what it is, and what it is used for, and the main thing is that it isn’t their money. Instead, explain that it is borrowed from the bank and they need to return it. Try explaining the concept from their point of view, perhaps through that prom outfit they are eyeing or a game they want. 

The trick is to explain it through their examples and level of thinking. Then, perhaps, you can step up the lessons by letting them participate in daily expenses, grocery stores, or new appliances you are planning, by letting in on the family problems and everyday life issues, and by explaining the solution, you give them importance.

That means they feel like their opinion matters when they make decisions on family matters. Although they will always be your child, even when they are 50, it is essential to teach them life. As you teach psychological and financial independence, you are setting them off to responsible adulthood. 

#6 Are There Any Other Ways to Get Cards for Kids without Issuing One on Myself?

Sometimes you start reconsidering whether the authorized user on your credit card is the best option for your child. It is vital when you are unsure if they will follow the rules and stick to the agreement. On the other hand, you might have a child yet to learn the basics of money management, and presenting them with the actual credit card is not the best option. 

Whichever the case, you still have other options that might be more suitable for your child. There are prepaid debit cards for kids, often confusing with toy credit cards. However, it is not that risky as an authorized user and is not a toy either—various providers of these debit cards for kids, such as BusyKid. The difference between the providers is in their fees and additional options. 

More Effective than Simple App – Less Troublesome than a Credit Card

But, in essence, it’s a money management app that connects parents’ and children’s accounts. Each provider offers up to five debit cards for kids for a monthly fee. These cards are certainly not toys as they are linked to a parent-controlled account. They can control and monitor their child’s spending and deactivate or reactivate the debit card all through the mobile app. 

How does it work? Parents download the app and leave essential personal information to register an account. Then, the app asks for a bank account from which the parent will release funds for the child. It is the primary account, and the parent can add up to five kids and monitor their spending through Visa® Prepaid Spend Card for kids. Each card is customizable and different for each child. The child can use it in online stores, in-store, or withdraw money from one of the numerous ATMs. 

In essence, the app is much more than a debit card. It’s a tool to teach kids financial literacy. The concept relies on teaching children work ethic and money management skills through chores and performance. 

Parents can list chores and the amount of funds the child will get once they complete each. For instance, cleaning their room and taking the trash can earn $2 for each task. Both parents can allow or disallow these rewards. Similarly, they can also set the amount for each job. 

There is also a bonus option that releases the funds set by the parent when a child completes a task outside the chores list—for example, giving Sarah $14 if she has good grades. Sarah gets her money deposited on her Visa® Prepaid Spend Card, and now she can make a decision. The app allows her to save money, spend it, or donate it. 

Parents can set the amounts for spending, saving, and donating the money. Once she gets used to such an arrangement, Sarah will understand that she earned that money by working hard and will have more consideration while spending it. In the majority of cases, children learn:

• The value of earned money
• How the debit card works
• Money management
• How to budget their income,
• How to give to others in need

Although it sounds less intimidating than giving your child access to your credit card, debit cards are an excellent way to ease them into finance, budgeting, and how to use that plastic card. Children who learn to be financially literate have a better chance of becoming financially responsible adults.

Hence, perhaps prepaid debit cards for kids are a better choice if you want to teach your kids about money management without having the risk of your child making charges you cannot cover. 

#7 What is the Best Prepaid Debit Card for Kids?

As already mentioned, numerous companies are offering services and prepaid debit cards for kids. You might be looking for one because your child is under 18, and you don’t want that image of a kid sliding money from your credit card without approval. 

The best-prepaid debit cards for kids come with an app through which you can monitor their spending. It gives you an insight into what your child is spending on, so you can use the information to guide them in a better direction.

The top four best choices for prepaid debit cards for kids are chosen according to user satisfaction, and reviews by financial companies:

BusyKid – Visa® Prepaid Spend Debit Card

BusyKid is a money management app connected with up to five Visa® Prepaid Spend Debit Cards for the entire family. Parents can use the app to deposit money, or they can use it to teach their kids financial responsibility. 

The app is straightforward to use with a clean interface that is easy to understand. Parents can choose the amounts of money their kids should save, spend, and donate. For instance, through doing chores, children learn that money doesn’t grow on trees. In addition, they have a section for spending, saving, or donating by getting their weekly allowance. 

For only $3.99/mo or $38.99/yr., a parent connects their bank account to the app and approves or denies the weekly allowance for up to five kids. If the kids are performing well, a parent can choose to add weekly interest to a child’s savings. Moreover, grandparents can treat them with additional allowance by scanning the QR code within the child’s app. It is an easy way to transfer gifts without waiting. 

Sometimes it’s not all about earning. There is something in giving to others. Your child can choose from nearly 60 charities to share their allowance. Sometimes we have our preferred charities, and parents can request the BusyKid support team to add charities of their choice to the list. 

If your child chooses to spend money, the app will give you a real-time notification about the transaction. They can make a purchase online, in-store, or withdraw from thousands of ATMs in the BusyKid network. 

Greenlight – Mastercard Debit Card For Kids

Greenlight’s basic features are similar to BusyKid with earning, spending, and saving goals. However, the parents can also set the rules, and they get notifications each time their child uses the debit card. In addition, they can arrange weekly or monthly money transfers, which automatically transfer funds from their account to the child’s debit card. It is also the most expensive option.

FamZoo – Prepaid Mastercard

Again very similar to BusyKid, FamZoo is a budgeting solution for families. It has a customizable list of chores like the previous two competitors. In addition, parents can set recurring payments from their child’s account to shared family expenses. For example, you agree with your child to pay phone bills. Unlike others, FamZoo is not connected to a bank account, and parents can make payments via PayPal. 

GoHenry – Prepaid Mastercard 

GoHenry is a financial education app linked to Mastercard debit cards. GoHenry has the same custom money earnings option as previous competitors. However, with GoHenry, there are spending limits that parents can set up. In essence, it is excellent for teaching money management and chores. This version charges about $5 a month per child in a family.

Why Get Your Kid a Credit or Debit Card for Kids?

The older generations were getting their allowance or gifts in cash. Nowadays, the modern generation rarely takes money in their pocket. Since everything is readily available online or with one card swipe, it makes sense to teach your kids about them. 

Imagine a scenario where you were reluctant to teach your kids about plastic, fearing they would use it without your knowledge. But, when you look at it, if they intend to do it, they will use it, especially if they already saw you using it. This is because kids are like knowledge sponges; they absorb everything you say or do. 

So, why not make an intelligent decision and allow them to understand and learn about credit and debit cards early? It just might change their financial behavior in the future, primarily if you teach them how to budget their money correctly. 

The BusyKid Spend Card is issued by MVB Bank, Inc., Member FDIC, pursuant to a license from VISA® U.S.A. Inc. All cardholders’ funds are insured by the FDIC in accordance with the FDIC’s applicable terms and conditions. For more information about your card terms and conditions including the VISA® Zero Liability policy go here. Cliq® is registered ISO/MSP of MVB Bank, Inc.