When it’s time for teenagers to drive, they’ll need to pay for gas, tolls and vehicle maintenance costs. Plus, whenever they are out on the road, there’s a good chance they may be spending money at restaurants, stores, theaters and parks, too. Fortunately, you have some good alternatives for controlling how much your child is able to spend. Handing your teenager a high-limit credit card with your name on it is not one of the best alternatives, so let’s explore a couple others.
You can set up a separate share draft account (checking account) in your child’s name, with a debit card issued in their name as well. This is the best way for a teenager to get in touch with the responsibility for monitoring an account balance and spending limits. If there’s only $10 in the account, there’s probably not enough to buy gas and get around. That means it’s time to talk to mom and dad about making a deposit. The communication factor is built into this alternative, which is a great way for them to learn about spending limits. This is true for teenagers and their parents as well.
If your teenager is heading off to college, have them consider opening a Forever Freedom NOW Account. The account features no maintenance fees, reimbursement of ATM fees from other financial institutions up to $15/month, and free “Forgive-a-Pay” twice per calendar year. Speak to one of Freedom’s member service representatives at any branch location or open an account here.
Debit cards are like credit cards with training wheels. They offer safety and stability up front, when it’s needed most. They don’t open the door to credit card abuse, and yet they help your teenager start building good spending habits of their own.