I hate cash. I try my best not to carry it. My children will soon be 16 and 13, and I would like them to experience the freedom of spending their money however they want. If their friends want to stop and get food after a game, they should be able to pull out their phones and quickly pay for what they need.
However, credit cards are only available for people over 18 years old. So, what are the options for avoiding using cash as a primary means of financial transactions for your children?
Use Your Parent’s Card
There is a simple option: Allow your child to store your card information in their phone’s wallet. Okay, that’s not great for multiple reasons. But did you know that you can add them as authorized users on the account, allowing them to build up their own credit?
Your child can have a credit card in their name. However, there are generally no safety rails. Their purchases can easily get lost amongst your own. They can spend up to your credit limit, and you are on the line to pay those bills.
You can do the same with a checking or savings account to allow your child access to a debit card.
Prepaid Card
A prepaid card can be a hassle as you need to continue purchasing new cards or update the amounts on the cards. Also, some services do not accept prepaid cards. However, you get the bonus of a finite amount of money your child can spend.
Teen Savings/Checking Account
Kids six or older can have a savings account with companies like Chase, 8+ with Capital One, and 13+ with Fidelity. Any bank you are currently doing business with will allow you to open an account for your child. Most of these will offer apps as well.
“Tech Companies”
Besides traditional banks, some companies can provide your child access to digital funds.
| Company | Fees | Ages |
| Greenlight | $5-15/mo | 0+ |
| Step | No Fees | 13+ |
| BusyKid | $4/mo | 5+ |
| GoHenry | $5-10/mo | 6+ |
| Current | No Fees | 13+ |
| Venmo | No Fees | 13+ |
All of these companies offer similar products. If your child is at least 13, there is no reason to pay monthly fees.
Separators for Teens
Since my children will be at least 13 by the end of the year, I will focus on the best candidates for teenagers. We already have Capital One and Fidelity accounts, so those will be the best starting places. The question would be whether any other app can offer something that neither company does.
Fidelity has no fees and a debit card. It also allows for investing, which interests me. You also get the same savings (currently 5%) for cash accounts. Parents can see activity in the account and cancel it, but there are no spending limits.
Capital One has baseline offerings similar to Fidelity. However, it is a checking account and does not offer savings or investment options.
Current requires the parent to have an account, and I do not want to create one.
Step matches a lot of what Fidelity has and does offer two years of credit building before turning 18. However, to have a savings account that earns interest, you must pay $5/mo unless you get a $500 direct deposit each month from a payroll provider.
Venmo seems fine and might be an additional use for a Fidelity account, as it allows for easier cash transfers between friends and family.
Conclusion
If your child is at least 13, leverage your current banks to avoid fees. If your child is under 13, be prepared to pay a monthly fee and try Greenlight.