INDIANAPOLIS — Training wheels help teach kids how to ride a bike, and kid-friendly debit cards are partially meant to be training wheels for a credit card.
How it works
Ten-year-old Terrance loves LEGOs — but he knows if he wants a new set, he has to pay for it himself.
"I do chores and sometimes, my uncle, if I get A's and B's, he gives me some money," Terrance said. "I save some of it, like half of it, and I spend half."
Ladonna Ross, Terrance's mom, said she keeps his spending and saving straight with GoHenry, a debit card and app designed for kids.
To encourage household participation, parents can create a chore list.
"In the app, he checks it [the chore] off when he does it. If he doesn't do it, he doesn't earn the money," Ross said.
When Friday payday hits, Ross transfers his allowance to the account.
GoHenry charges $3.99 a month per kid for the card and app, and it is known for its parental controls, kind of like cable.
"Pretty much can control how much he can take out at the ATM, I can control if he can take anything out at the ATM," Ross explained.
The limit allows Ross to be in control while Terrance learns boundaries.
"I just want him to be responsible because I didn't get taught that at early age. It was me going to college, being thrown into a credit card, you know, learning the hard way," Ross said.
Other cards with parental controls
Ted Rossman with Creditcards.com said GoHenry isn't the only company that offers this.
"We're seeing increased interest in debit cards and checking accounts for kids," Rossman said.
Greenlight is a similar product that charges $4.99 a month for up to five kids instead of per person, and Chase First offers a free version if mom or dad is a customer.
"There are not typically overdraft fees on these kinds of accounts. Typically, the financial institution would just deny any charges that go over the limit," Rossman said.
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