Cash or Debit Card for 11yrs old?

[theglobetrotter]

Our daughter is very responsible with money, and a tight wad. I am quite pleased with how she is with money.

She has a bank account and at 11yrs old, three weeks from now more less, she can get a debit card.

I love debit cards. It's convenient and I can track expenses easier than cash. With cash I seem to buy random things still at times. What I don't like about debit cards, for young ones, is that I cannot control where that card can be used even though I know she won't be buying tobacco or booze online :) Also, there is a potential to overdraft I believe.

We live in the UK and there are these two options: http://www.theguardian.com/money/2014/jul/03/debit-card-firms-digital-pocket-money. I like goHenry's options better than Osper. It's what I want in terms of security. But good gosh, there's a fee for everything it seems like. I feel like these two cards are like having a YNAB app + debit card combo.

So, should we just stick to cash or is a normal debit card a nice add on too? And if she wants to buy something online, mostly Amazon for a book or some games/educational toys, I'll do the buying still and have her pay me? While she's good at not spending her money, she's not good at keeping track of where her money goes and how much she has left and how long until she can get so and so. And that's why I am interested in those two card options above.

Thoughts? How do you go onto the next step of teaching kids to be responsible with their money and keeping track of debit and credits? Thanks!

[kathrynd]

cash

[I'm a red panda]

To me 11 is a bit too young for a debit card. I'd stick with cash.

13 or 14 seems like the time for a debit card. (I think I got a checking account at 15 and a credit card at 16, but kids seem to do this stuff younger now. The world has changed.)

[arebelspy]

Debit.  Start having her link "spending on a card is real money" and learning how to track balance online, etc.

[gaja]

We will probably be getting our 8-year-old a debit card this year. For kids that age, there is a card with a spending limit of $80, and no fees. Cash has no intrinsic value, I think it is much more important that they learn the value of money and to live in a modern world.

[greenshade]

I think a debit card at that age will help her financial education in the long run.  She is in a controlled environment (not away from home on a college campus) and you will be able to teach her to use it responsibly.

[Goldielocks]

11 is young for a debit card.   Our 12 y.o started to buy upgrade coins on "free" downloaded games with his.

BUT
1- he got to learn about the panic on dad's face when $180 disappeared from his account over 3 months (he signed up for a monthly subscription without realizing it).   
2-He got to learn how to go to the bank (with dad) and ask the person there for help in cleaning it up.
3- He got to sit beside dad who called iTunes or whatever and got them to reverse a few charges, to see how it was done. 
4-Then he got to have his debit card cancelled and replaced by the bank,
5- and finally, the new one was frozen in a block of ice, for emergencies only, just like a real credit card, 


and I think he really did learn after 4 days of this activity.   6 months later, the card was "released" from its icy prison, and no more charges have started.   He is also better with cash around his room and using his wallet better.

So - yep, too young to be responsible with it, but not too young to start learning how to become more responsible.

[Left]

I'd go prepaid card, not debit since it is linked to a bank account
Prepaid, if it is lost, you are only out of that much money unlike a credit card (can they even get one at that age?), you may be able to recover the money by calling them and say it is stolen/lost

Cash is just so much easier to lose track of, in my opinion. But I never liked cash to begin with. With a card, you can get those lanyards and hole punch the card and "wear" the card on the child (like they do to adults at casinos)

Draw back of prepaid card is getting that pesky unspent few cents/dollars off it. Though AMEX has a prepaid card that is nice, no fees, easy to get money back off it too.

I thought you could set "limits" on where a prepaid card is spent by limiting what type of vendors it allows. Like only "food" and "retail" places.
UK link about this and relates to this thread http://www.theguardian.com/money/2012/nov/15/debit-card-children

edit sorry didn't see you aren't in US? Not sure if you have the amex option

also as part of update, when you say debit, do you mean prepaid card? Not sure where but I've seen foreign references that imply something like this and not the debit card that we use in the US where it is linked to a bank account

[arebelspy]

11 is young for a debit card.   Our 12 y.o started to buy upgrade coins on "free" downloaded games with his.

BUT
1- he got to learn about the panic on dad's face when $180 disappeared from his account over 3 months (he signed up for a monthly subscription without realizing it).   
2-He got to learn how to go to the bank (with dad) and ask the person there for help in cleaning it up.
3- He got to sit beside dad who called iTunes or whatever and got them to reverse a few charges, to see how it was done. 
4-Then he got to have his debit card cancelled and replaced by the bank,
5- and finally, the new one was frozen in a block of ice, for emergencies only, just like a real credit card, 


and I think he really did learn after 4 days of this activity.   6 months later, the card was "released" from its icy prison, and no more charges have started.   He is also better with cash around his room and using his wallet better.

So - yep, too young to be responsible with it, but not too young to start learning how to become more responsible.

All that is GREAT experience.  Even - especially - the losing money.

That's why I'd advocate the debit card over cash.  Better to lose $100 now and learn how to be responsible with it than lose tensof thousands later spending irresponsibly and live paycheck to paycheck your whole life.

[GizmoTX]

When DS was about 10, he received 2 gift cards from relatives, issued by banks rather than a store. He saved them for some bigger purchase, but when he went to use them (many months later) he & we were horrified that the issuers had been steadily deducting $5/month from each card & there was zero left. I was so furious that I called the issuers but they wouldn't budge. On top of that, they charged the buyer a fee to issue those cards. MAJOR rip off. I've noticed that many store gift cards now promise plainly that their card will never expire. Some have a registration feature that allows replacement if lost -- this saved DS after a birthday gift card was mistakenly tossed out with the party debris. Nice, but stores love gift cards because so many end up never being used.

On the other hand, a debit card linked to a checking account really needs to be in the hands of a teenager who already has some experience managing cash & not losing things.

[arebelspy]

When DS was about 10, he received 2 gift cards from relatives, issued by banks rather than a store. He saved them for some bigger purchase, but when he went to use them (many months later) he & we were horrified that the issuers had been steadily deducting $5/month from each card & there was zero left. I was so furious that I called the issuers but they wouldn't budge. On top of that, they charged the buyer a fee to issue those cards. MAJOR rip off. I've noticed that many store gift cards now promise plainly that their card will never expire. Some have a registration feature that allows replacement if lost -- this saved DS after a birthday gift card was mistakenly tossed out with the party debris. Nice, but stores love gift cards because so many end up never being used.

Yeah, lots of states made that illegal, so then many companies just switched over to it having no fee anywhere.  Some still do that in the states that allow it though.

On the other hand, a debit card linked to a checking account really needs to be in the hands of a teenager who already has some experience managing cash & not losing things.

The nice part is that it avoids all the horrors of the above, assuming you get one with no fee.  And even if they lose the card, you just call and cancel it and get it reissued, with no loss of money (unlike the gift card).

[BaldingStoic]

I say Debit. Your child sounds like she's mature enough to use the card responsibly and it's a great teaching tool.  Too many kids get their first card in college and lack the disciple to use the card responsible.  Start early, with parental guidance.