Teen Checking Account – Part Three

Is A Debit Card A good Idea?

Attaching a debit card to your teen’s checking account can be quite convenient. That and an ID will get them just about anything they need – from food to gas to books, items, and clothes. If you haven’t figured it out already – this can be a good thing or not so good; depending on how well you teach your child to manage this responsibility.

Here are the basics…

A debit card looks and is used very much like a credit card. However, instead of drawing on a line of credit, the money is moved automatically from your teen’s checking account to the merchant.

Generally you can’t use a debit card to spend more money than you have in your account. The card will usually be declined if your teen tries to make a purchase that exceeds the available funds. Of course, some transactions are allowed where the merchant runs the card at a later time. Beware! If these transactions are made for more than the amount of money available to pay for them, it can cost you big bucks in fees – especially if they try to run the card more than once before you are alerted!

Some banks may have age restrictions on issuance of debit cards, and in addition, may charge an annual fee or have fees associated with use of the debit card. You’ll want to check before you open an account to be sure the services offered meet your needs.