Are checking accounts and prepaid credit cards useful for children?

It’s a sensitive issue: prepaid credit card and / or the children’s account ! Does this make sense? There is no dispute that children should learn how to use money responsibly. Pocket money is usually the first way to deal responsibly with this means of payment.

But for many parents, this soon leads to the following question: How do I make the money available to my child? Cash or rather in an account? Or maybe on a prepaid credit card? What may seem incomprehensible at first glance, however, is a real problem for many parents.

This is confirmed by the fact that a large number of banks have corresponding products in their program. Be it the so-called children’s account or the PrePaid credit card for children and teenagers – everything is available, you just have to use it. But the question arises whether these products are really “useful”?

Not every bank product for children makes sense

Not every bank product for children makes sense

If it is up to the banks, the handling of money cannot begin early enough. Accordingly, financial institutions offer the first bank product, a so-called child account, from the child’s age of 7 years. Some banks even go so far as to make it possible for children to receive a prepaid credit card from this age.

The idea that a child is just learning to count but is already using a credit card seems extremely incomprehensible. It is therefore not surprising that experts make a clear recommendation here that children of elementary school age generally do not have a card for financial transactions – neither a prepaid credit card nor a “simple” bank card.

In the case of children of middle age from (14 years), however, a youth account should definitely be set up. Thus, the pocket money or the collected savings can flow into this account and be used if necessary. In this case, however, the parents, together with their own child, should have a corresponding mutual availability. It should also be ensured that this account is provided with a corresponding bank card. However, no payment function should be integrated here.

Attention with a prepaid credit card for children

Attention with a prepaid credit card for children

Once the basic handling of money, account and card has been learned and financial confidence in your own child has been established, the choice of a PrePaid credit card for children can be made in a further step. But here too there are dangers that you should be aware of. For example, a prepaid card for children is not generally as secure in terms of its use as it is often presented.

Which is not due to the card itself, but rather to the system behind it. But what does it mean? However, unfortunately, it still happens that shops do NOT immediately check the current amount that should be paid with a prepaid credit card for children online.

It follows that in the worst case scenario, more money can be withdrawn than is available in the account. If additional fees are charged for this “tolerated overdraft”, children quickly slide into the red. In addition, a large number of prepaid credit cards on the market can be classified as very expensive in terms of their fees. It is therefore important for parents to find out in advance about possible fees for the use and to put them in an honest connection to the planned use.

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