By Kris McDermott, VP-Consumer Lending Manager
Cashless venues are becoming more common, especially at entertainment and sporting events. For example, Camp Randall—the site for the High School State Football tournament—is cashless, which can sometimes create issues for parents sending their children independently with another family or as part of a group.
Another scenario in support of cashless options is that you simply don’t want to send your child on that cross-country band trip with a wad of cash.
So, what are the options for kids to go “cashless?” Let’s explore three potential solutions:
- Debit Card
- Credit Card (authorized user on adult’s card)
- Prepaid VISA Gift Card
Additionally, all of these options can be loaded into the child’s Wallet app on a smartphone, so they don’t even need to carry the physical card with them.
Debit Card
If your child has a checking account at Lake Ridge Bank, they can be issued a debit card upon request. Different financial institutions will have their own criteria for this option, but we recommend parents wait until their child is a tween or teen to get set up with a debit card.
Benefit: This option is available at a younger age to anyone who has a checking account associated with their savings. A debit card spends money directly from their checking account, so it’s easier to see the immediate correlation to money.
How to open: The minor child can visit any Lake Ridge Bank location with a parent or guardian who is the co-owner on the child’s checking account (required until age 18). The bank will help you open a checking account if the child does not already have one. The bank can issue the debit card immediately.
Credit Card
Children under 18 are not legally allowed to have their own credit card. However, many credit card vendors, including Lake Ridge Bank, enable parents to make their child an authorized user on the adult’s credit card. There may be minimum age limits for this option. Credit bureaus typically do not report until the child is 16. The card will show the child as an authorized user.
Benefit: The minor can build a credit history based on their parents’ credit card activity. This could be a benefit as they try to apply for their own card or try to rent an apartment down the road. Remember, however, that not all parents have good credit scores, so this “pro” can quickly become a “con” in the wrong scenario.
How to open: If you have a credit card through Lake Ridge Bank, visit the location nearest you to get your child set up as an authorized user on your card. If you have a card from another vendor, contact them directly for more information.
Prepaid VISA Gift Card
If we were using a Goldilocks and the Three Bears format to share this information, the Prepaid VISA Gift Card might fall into the “just right” category. Prepaid gift cards have a minimal $8 fee to set up initially, but they can be registered for protection and recovery if lost or stolen. You choose an amount to load onto the card, which essentially creates a budget limit for your child. If registered, the parent can track spending and reload additional cash onto the card online once it is set up. This can be a great option to help your child think before they spend and stick to an agreed upon limit but still enables you to add money in a pinch or emergency. Some parents even use these for a monthly allowance.
Benefits: A Prepaid VISA Gift Card provides a spending limit but can be reloaded any time online if needed. We recommend you register the card for extra protection if lost or stolen. A gift card can be purchased by any adult, so it’s a nice option for grandparents or aunts and uncles or even holiday gifts for a friend. There is no age limit and there is minimal risk involved.
How to open: Any adult can come into a Lake Ridge Bank location near you to purchase a Prepaid VISA Gift Card at the counter, and we can help you get it registered if you want. You leave immediately with the activated card(s). You can reload at any time online, or at your local Lake Ridge Bank office after that.
To learn more about any of these banking options, call or visit the Lake Ridge Bank location nearest you.
