Debit cardEducating

Kids learning the difference between debit and credit cards

By September 3, 2020 No Comments
Portrait of a shocked little girl in hat and skirt

The piggybank is usually how children are introduced to money. The jar becomes heavier and heavier with coins till one day it is broken open to reveal its treasures. Welcome to Savings 101.

Romantic as that sounds, it is a hopelessly out-dated way to teach children how to handle money – unless you want them stuffing their mattress with notes once they grow up. Much better, get a kid’s debit card instead and teach them how to manage ‘plastic’ money from an early age.

Debit cards and credits cards are the two primary means of payment today; and though they look similar they couldn’t be any more different. That’s why first time credit card users are so often lured into a ‘credit trap’, as they struggle to manage the seemingly endless piggybank that it seems to be.

Reminding ourselves of the differences between a debit and credit card

It’s not just kids who need to learn about debit cards vs. credit cards. As adults we have become so accustomed to whipping out the “Visa” or “Mastercard” or “Amex” we too have forgotten that using a credit card is not actually spending our own money. Here’s a quick refresher on the basics of a debit card and credit cards:

Debit cards – Linked directly to a savings or checking account; money is withdrawn directly from the account for transactions; you can spend only as much as is available in the account.

Credit cards – Withdrawals and spending are a ‘borrowing’ against a line of credit; you can spend up to your credit limit; it has no correlation with how much money you have in the bank.

Why kids need to learn the difference between a debit and credit card

For a child learning to distinguish between the two is the first step to financial maturity. For parents, too, it can mean fewer surprises in their credit card bills – though getting a SpendSafe debit card for their 12 year old will achieve the same thing.

Spend what you have – Debit cards let children spend up to what they have and no more. The first “Payment Declined” message may be embarrassing but it teaches them to manage their spending better.

Parents not picking up the tab – A parent’s credit card seems like an endless well of money to a kid. Giving them ‘unlimited’ spending power (when you quietly pay the statement at the end of the month) hurts their ability to weigh-up the value of purchases.

No unexpected fees – Credit cards have fees and interest rates attached to almost everything. Didn’t pay your statement balance? Pay monthly fees. Did you withdraw cash with a credit card – there’s a cash transaction fee for that. Debit cards have far fewer fees and a far more transparent fee structure.

Same convenience – Debit cards and credit cards are accepted at virtually all the same places. In fact, parents can reload the SpendSafe debit card in a pinch so you know your child is never without money.

Educate and empower your child for the financial future of today. Kids’ debit cards offer a safe space for children to learn to spend on their own and manage their own money. With the parental controls we offer, the SpendSafe debit card is even suitable for kids under 12 years old!


Try out SpendSafe and register for a personalized debit card for your child today.

Monitor spending | Set spending limits | Reload the card instantly