What is the first step of money management that you can teach the kids? Even though most of the parents of earlier times liked to use cash to teach their children money management, the parents of today are choosing between many providers searching for the best debit cards for kids.
If you are following the same path, then you should understand everything about the credit cards or the debit cards for your kids. In this article, we have talked about the differences between a credit card or debit cards and the best ways to teach differences about them to your kids. Check it out.
The Difference Between Debit cards and Credit Cards
The first difference that comes between the debit card and the credit card is the way money gets available to the user. When the teenager uses the debit card, the money gets deducted straight from their bank account. That means the debit card acts more like a digital wallet. If you don’t have money in your account, you can’t use your debit card.
While using the credit card, the recipient, however, gets the money directly from the bank. Of course, the money is available at the time of purchase, but you get the money as a loan from the bank which you have to return within a certain time limit.
Another factor is, you can buy things using credit cards until and unless you reach the money limit. The advantage of using a credit card is that it allows you to purchase something when you don’t even have the required amount in your bank account. However, as you borrowed the money fro the bank or other credit card companies, you have to pay some interest.
If you could not pay the borrowed amount within the given time, you might have to pay some extra money to the bank or the credit card company.
What Is The Minimum Age for a Kid To Get a debit card?
You can get a debit card for kids when they are 11 years old. This is the age limit for the kids to have a bank account of their own. However, some of the specialist apps, such as RoosterMoney is offering debit cards for kids of 6 years of age.
Credit cards, on the other hand, are not issued to a person until and unless they are 18 years. However, you can still explain to them the way the debit and credit cards work before they become an adult. This will help them to make a better and more responsible decision about handling money.
Getting the best debit card for your kid is the perfect decision for you to make sure children are aware about the basics of money management. The debit cards allow you to create a supervised environment for your kids where they can have a debit card on their own, which they can use to buy different things. As you will have full control over the money, you can easily track the expenses of your child and create spending limits for your children as well.