Debit cards for teens

[XYSRUS]

My daughter is going to a baseball game tonight with church youth group and I went to the ATM today to get her some cash for snacks and it got me to thinking about getting her a debit card. She's 14. Just looking for general advice on when and how people handle it.

 

[jrmasm]

A few months ago I opened Capital One Teen account for my DD. No fees and pays interest.

 

[CdnCarrie]

I have an ATM card that does not have a visa or MasterCard logo if I need cash.

My bank/debit card has never had a credit card logo on it. Is this common in the USA? Are debit cards also credit cards down there?

 

[aprilgail]

My daughter got her own checking and visa/debit card at 13- she wrote her own checks for anything she needed a check for in school from that point on. She would have her payroll checks at 13 put directly into her account where before that if went into mine and I would have to keep track of what was hers.

 

[ronandannette]

I have an ATM card that does not have a visa or MasterCard logo if I need cash.

A debit card is too problematic if compromised.

Your account is cleaned out via your debit card the same day your mortgage, water bill, and insurance are paid, all those bounce. Your now having to explain to all three why you missed a payment. Sure the bank will give you your money back but you have a lot of work to do and have to hope that your creditors are nice and don’t report you as not paying to the credit bureaus.

With a credit card you open your bill, see thousands of fraudulent charges, make one call and they are all removed.

Debit cards carry too much risk when compared to a credit card.

Debit cards are a way of life here and have been for 30+ years. Everybody and I mean everybody, pays by debit. We do not have dual debit/credit cards here that I know of and only recently have one or two banks begun offering a debit product that has a visa logo so it can be used for on-line purchases although it does not offer credit - only access to available funds. I’d contend they are just as secure as a credit card in terms of possible fraud. Less maybe because our debit cards have transaction limits/daily limits. You can set them higher if you want but the default ones are relatively low ($500 per transaction/day).

As to another comment you made upthread - having a supplemental card issued to a child on a parent’s credit account does NOTHING to establish that child’s credit history.

My bank/debit card has never had a credit card logo on it. Is this common in the USA? Are debit cards also credit cards down there?

Their bank cards are different than ours and the way debit works is different too. It always freaks me out a little when I go to use debit in the States and it doesn’t give me the choice to pay out of my chequing account or savings account.

 

[GrnMtnMan]

A few months ago I opened Capital One Teen account for my DD. No fees and pays interest.

I just did this for my 11 and 8 year olds.

I'm also generally against debit cards for adults (due to the lower level of fraud protection), but for the kids this CapOne account makes sense since there's no fees.

 

[ten6mom]

My kids have savings accounts at my credit union but I just went down yesterday to add a checking account for my almost-15-year-old since he sometimes earns money doing yard work for the neighbors and needs a place to keep some of it. They asked him if he wanted a debit card and right now he does not; however it will be easy enough to add one later.

For those parents who added your child(ren) to your credit cards- what did they do about photo ID when they used them? Did you get them a state-issued ID to use if they weren't old enough to have a drivers license?

 

[GoingSince1990]

My kids have savings accounts at my credit union but I just went down yesterday to add a checking account for my almost-15-year-old since he sometimes earns money doing yard work for the neighbors and needs a place to keep some of it. They asked him if he wanted a debit card and right now he does not; however it will be easy enough to add one later.

For those parents who added your child(ren) to your credit cards- what did they do about photo ID when they used them? Did you get them a state-issued ID to use if they weren't old enough to have a drivers license?

My 13 year old daughter has never been asked for photo ID when using her credit card. Come to think of it, neither have I, except when buying booze.

 

[mco65]

My bank/debit card has never had a credit card logo on it. Is this common in the USA? Are debit cards also credit cards down there?

Yes it is common but it does not mean your debit card doubles as a credit card. Is simply means that card can be used where Visa or Mastercard are taken. If you use your debit card and don't specify debit (w/pin) or of that vendor does not take debit cards then the EFT will go through Visa or Mastercard switch who will take a cut and then pass it to your bank... It just a convenience thing and allows you to use your card at more places.

 

[CdnCarrie]

Debit cards are a way of life here and have been for 30+ years. Everybody and I mean everybody, pays by debit. We do not have dual debit/credit cards here that I know of and only recently have one or two banks begun offering a debit product that has a visa logo so it can be used for on-line purchases although it does not offer credit - only access to available funds. I’d contend they are just as secure as a credit card in terms of possible fraud. Less maybe because our debit cards have transaction limits/daily limits. You can set them higher if you want but the default ones are relatively low ($500 per transaction/day).

As to another comment you made upthread - having a supplemental card issued to a child on a parent’s credit account does NOTHING to establish that child’s credit history.

Their bank cards are different than ours and the way debit works is different too. It always freaks me out a little when I go to use debit in the States and it doesn’t give me the choice to pay out of my chequing account or savings account.

Over the years after reading here I have figured the USA debit cards must be different than what we have up here. I don't really understand what they mean by debit card!

 

[mnrose]

The thing I didn't like about credit cards for my teens when they were younger (and why I opted against them) was because it didn't teach them to manage THEIR money, because they were just spending mine. For convenience, I can get why parents do it. But, I was looking to also teach them money management.

 

[kdonnel]

As to another comment you made upthread - having a supplemental card issued to a child on a parent’s credit account does NOTHING to establish that child’s credit history.

Actually it does.

My son(16) and daughter(19) each have many years of history reported to their credit reports by being authorized users on my Disney Visa Card. On my daughters credit reports it is listed as date opened 3/2/2003 so over 16 years of history at this point. My son technically can't have a credit report yet due to his age but I know it will instantly appear when he is 18.

The FICO 08 model includes valid authorized users when calculating the credit score, as does the Vantage 3.0 model.

https://wallethub.com/answers/cc/do-authorized-users-build-credit-2140666544/

Yes, authorized users do build credit. You can actually build a good or excellent credit score just as an authorized user on a credit card. When you become an authorized user, the account is added to your credit report, which means on-time payments by the primary cardholder will help you build good credit history. But because authorized users are not responsible for paying the bills, credit scores don’t give authorized user accounts as much weight. So you won’t build credit as fast as an authorized as you would with your own credit card account.

 

[kdonnel]

Over the years after reading here I have figured the USA debit cards must be different than what we have up here. I don't really understand what they mean by debit card!

This article explains the differences between US Debit and Canadian Debit.

https://www.helcim.com/article/how-visa-debit-works-in-the-us-vs-canada/
Basically our debit cards are issued with a Visa or MasterCard logo on them and can be used anywhere that accepts Visa or MasterCard. Each purchase can be run as either credit or debit. Which option you pick if given a choice might relate to any fees you might be charged for using one over the other or rewards you might receive for picking one over the other.

In either case the funds are withdrawn from your checking account.

Since a US issued debit card can be used virtually anywhere with no ID and no PIN it is a bad idea to keep one in your wallet.

It is exposing YOUR money to fraud unnecessarily when a credit card is available and instead exposes THEIR money to fraud.

https://www.forbes.com/sites/joshbarro/2012/04/03/why-you-should-never-use-debit-cards/#49dfab917848

If you make a claim about fraud on your credit card, the disputed charge is frozen and you can delay payment until your bank completes its investigation. But if someone fraudulently uses your debit card, the associated funds in your bank account are unavailable until the investigation is resolved. Fraud on your debit card can cause you to lose access to the funds you need to pay rent and bills, even if the bank ultimately finds in your favor.

https://thepointsguy.com/guide/why-you-shouldnt-use-debit-card/https://www.fool.com/investing/general/2014/01/14/why-you-should-never-use-your-debit-card.aspxhttps://clark.com/personal-finance-credit/never-use-debit-card-pay/

Debit card fraud:

• You’re responsible for only up to $50 of unauthorized transactions if you report the card as lost or stolen within two business days.
• Didn’t report the fraud within two days? You could lose up to $500 if someone uses your physical debit card without your permission — provided you report the fraudulent charges within 60 days after your statement is mailed to you.
• Didn’t make that 60-day window to report fraud? You face potential unlimited damage if someone uses your ATM or debit card without your permission.

Those are some pretty strict guidelines you have to meet for getting protection when you regularly use a debit card, right?

Contrast that with the level of protection you get when you use a credit card:
Credit card fraud:

• You are not responsible for unauthorized charges under federal law if your credit card number is stolen.
• You won’t be held liable for more than $50 in authorized charges if your actual card is stolen.

That is why I refuse to have a debit card even issued against my checking account. It may take some work but banks will issue a classic ATM card(apparently a Canadian debit card) if you request one.

 

[mjkacmom]

My kids have savings accounts at my credit union but I just went down yesterday to add a checking account for my almost-15-year-old since he sometimes earns money doing yard work for the neighbors and needs a place to keep some of it. They asked him if he wanted a debit card and right now he does not; however it will be easy enough to add one later.

For those parents who added your child(ren) to your credit cards- what did they do about photo ID when they used them? Did you get them a state-issued ID to use if they weren't old enough to have a drivers license?

There is only one store I can think of that asks for proof of identity. Dd18 carries one of my cards in her wallet to use, my kids take our cards starting around 13 or so, when the start shopping without us.

 

[FlightlessDuck]

The bank we use had student bank accounts. The kids got allowance put into their accounts, and they had a debit card.

 

[jrmasm]

This article explains the differences between US Debit and Canadian Debit.

https://www.helcim.com/article/how-visa-debit-works-in-the-us-vs-canada/
Basically our debit cards are issued with a Visa or MasterCard logo on them and can be used anywhere that accepts Visa or MasterCard. Each purchase can be run as either credit or debit. Which option you pick if given a choice might relate to any fees you might be charged for using one over the other or rewards you might receive for picking one over the other.

In either case the funds are withdrawn from your checking account.

Since a US issued debit card can be used virtually anywhere with no ID and no PIN it is a bad idea to keep one in your wallet.

It is exposing YOUR money to fraud unnecessarily when a credit card is available and instead exposes THEIR money to fraud.

https://www.forbes.com/sites/joshbarro/2012/04/03/why-you-should-never-use-debit-cards/#49dfab917848

https://thepointsguy.com/guide/why-you-shouldnt-use-debit-card/https://www.fool.com/investing/general/2014/01/14/why-you-should-never-use-your-debit-card.aspxhttps://clark.com/personal-finance-credit/never-use-debit-card-pay/

That is why I refuse to have a debit card even issued against my checking account. It may take some work but banks will issue a classic ATM card(apparently a Canadian debit card) if you request one.

From the article you linked regarding US vs Canadian debit cards:

How Visa Debit Works in the US
In the US, Visa Debit allows customers to use the same card to make both their credit and debit purchases. The card runs on the same credit network whether the purchase is for Debit or Credit. Because the card operates on the same network whether it’s a debit or credit purchase the cards can be used anywhere you see the Visa symbol at a merchant.
It is the customer’s responsibility to clarify if they would like to make a purchase using credit or debit. A credit purchase uses their available credit card limit while debit will deduct the purchase amount from the available balance in their chequing or savings account. The merchant will then run the card through their payment processing system based on how the customer wants the transaction to be processed.



The bolded is 100% untrue for my debit card. Regardless of whether I select debit or credit, the transaction is deducted from my checking account.

 

[kdonnel]

From the article you linked regarding US vs Canadian debit cards:

How Visa Debit Works in the US
In the US, Visa Debit allows customers to use the same card to make both their credit and debit purchases. The card runs on the same credit network whether the purchase is for Debit or Credit. Because the card operates on the same network whether it’s a debit or credit purchase the cards can be used anywhere you see the Visa symbol at a merchant.
It is the customer’s responsibility to clarify if they would like to make a purchase using credit or debit. A credit purchase uses their available credit card limit while debit will deduct the purchase amount from the available balance in their chequing or savings account. The merchant will then run the card through their payment processing system based on how the customer wants the transaction to be processed.



The bolded is 100% untrue for my debit card. Regardless of whether I select debit or credit, the transaction is deducted from my checking account.

That article does seem to be incorrect for the US in that regard. That I know of there is no card issued in the US that is actually a credit card and a debit card.

Edited to add:

I wonder if what they are very poorly alluding to is the difference in how quickly the money is removed from your account when run through the Visa/MC network vs the Debit network? When used as a debit the money is removed quicker then when run as a credit.