You don’t need to carry bills and coins to have money in your pocket. Some kids keep their money on debit cards. These plastic cards are linked to a bank account. They allow people to access their money and buy things, using a password called a personal identification number, or PIN.
“When you use a debit card for payment, it is like you are telling your bank to send a certain amount of your money to the store electronically,” explains Walter Andal, the author of the book Finance 101 for Kids.
Many parents like the convenience of debit cards. They can instantly send money to their kids’ accounts—even if they don’t have cash in their wallet. Parents also see debit cards as a good tool for teaching kids about managing money. Debit card apps let kids easily track how much they spend and save. Also, a lost debit card can’t be used unless the password is known, but lost cash is often gone forever.
However, other people argue that paying with a card instead of actual money can lead kids to make poor decisions.
“You might be tempted to buy things that you do not really need,” Andal warns.