A Simple Guide to Teach Your Children Responsible Use of Debit Cards
Money management is one of the hardest yet most necessary teachings that the parents could give to their children. Most of the parents use debit cards to help their children manage money. However, most of them are afraid to put a debit card in the hands of their children.
While you should not let your children have unlimited access to your debit cards, you need to teach them the ways they can handle their Spendsafe debit cards responsibly. The best approach is to take things slow and teach your children the responsible usage of debit cards taking one step at a time.
Most of the banks and financial institutions do not offer debit cards to the teens until they reach 18 or 19 years of age. While you should persuade your children to get a debit card as soon as they are of age, understand that both you and your children will be responsible for the usage and the debts incurred on the debit card.
If you can drive things right, the debit cards become a great tool for you to teach your children about spending their money smartly. Here are some steps that can help you out in that venture.
Inform Your Children about the Debit Card
To make sure that your children use debit cards in the right manner, you have to make sure that they have the right idea about the nature of debit cards. You should tell your children that a debit card is just a form of agreement between you and the financial institution.
By using that card, the teenager would be able to get a loan of a certain amount of money for a certain period. Make sure that they understand that Spendsafe debit cards do not offer extra or free money. You not only have to pay the money back to the financial institution but also offer some extra amount as interest.
If Higher Debit Limits is a Good Thing?
A higher debit limit simply means that the bank or other financial institutions think that you might be willing to spend more money using the debit card. The financial institutes also consider you reliable enough to pay the money back.
The status consciousness of the teenagers often drives them to avail higher debit limits. Being the parent, you should make them understand that the higher debit limit can encourage them to spend more than they can pay off in a single month. The best debit limit for a teenager with a part-time job should be equal to his/her one month’s salary.
However, most of the financial advisors think that putting a $500 debit limit to the card of the teenager should be enough. The limit is not that unmanageable for the teenager with a part-time job as well as the parents. It also gives the teenager a reasonable limit for using the debit card.
The Importance of Paying The Debit Card On-Time
When the teenagers step into young adulthood, most of them find it hard to get debit as they do not have any debit history. Having a Spendsafe debit card earlier helps them during this time. If you use the debit card wisely when you were a teenager, it can easily help you to create a positive debit history.
To do that, the teenager should avoid making late payments at any cost. Paying the minimum amount should also be avoided. With each month a hefty interest of the debit card company gets added on top of the amount owed. That means in the long run, this habit can be very expensive. This type of paying habit can also affect your debit ratings negatively.
Necessary Information about Debit Card and Id Theft
Before using the debit cards, the teenagers should know that their debit cards, as well as their identities, can be stolen. So, before persuading them to apply for a debit card, you should make them understand the importance of the card.
Tell them not to lend their debit cards to anyone. You should also explain that they should never respond to any text or phone messages that asks for the information of their debit cards.
These are all the necessary information that you should let your children know before helping them applying for a Spendsafe debit card. Studies show that most people spend more money while using their debit cards rather than debit ones. So, before they start using the card, make sure that they understand the value of money. If your teenage children use debit cards wisely today, it will help them to create a brighter financial future tomorrow.