Back to Learn it Back to Learn it

Prepaid card vs debit card vs credit card. Which is the right card for my kid?

May 28, 2024

Read Time: 2 minutes, 532 words

Whether you're a seasoned pro or just getting started, understanding the ins and outs of credit, debit, and prepaid cards is key to helping your child build healthy money habits. So, let's explore the differences and benefits of each and find the perfect fit for your little grownup.

The Three Types of Cards: Credit, Debit and Prepaid. 
Credit Card 
Debit Card 
Prepaid Card 

A credit card is like a promise to pay for something later. It's a useful tool for building a good credit history, but it's important to manage it wisely to avoid debt. Generally, you need to be 18 years old to get a credit card in your name. 

A debit card is like a direct link to your bank account. You can only spend the money you have, making it a great way to teach kids about responsible spending. Many banks offer debit cards to kids as young as 12, often linked to a joint account with a parent.

A prepaid card works like a digital money jar. You load it with money, and kids can spend only what's available on the card, making it a great option for younger children who are learning about money management. 

Why Choose a Credit Card for Your Kid? 

While a credit card can be a useful tool for building credit history and managing expenses, it's typically not accessible to children under 18. It's important to teach kids about responsible credit card use when they are old enough. 

 

Why Choose a Debit Card for Your Kid? 

Control and Budgeting: Like a prepaid card, a debit card helps you manage your child's spending by limiting it to the funds available in their account. This can teach them valuable budgeting skills from a young age. 

Safety: While linked to a bank account, a debit card can still offer safety benefits. It doesn't allow overdrafts, so there's no risk of accumulating debt. Plus, transactions can be monitored. 

Convenience: Debit cards are widely accepted, making them convenient for both online and in-store purchases. They also teach kids about responsible spending within their means. 

While credit and debit cards have their benefits, a prepaid card offers a safe and practical way to introduce kids to the world of money management. That’s why we at Kit offer a prepaid card with our pocket money app. 

 

Why choose a prepaid card for your kid? 

Control and Budgeting: With a prepaid card, you can control how much money is available to your child, teaching them valuable budgeting skills and a little bit of independence from a young age.  

Safety: Since prepaid cards aren't linked to a bank account, there's no risk of overdraft fees or access to sensitive banking information. The Kit prepaid card and account also includes parental controls that allow you to block merchants and set spend limits. 

Convenience: Prepaid cards can be used online and in stores, offering a convenient way for kids to make purchases while learning about money management.  

 

Choosing the right card for your kid is an important decision that can help them develop their money smarts. And with Kit by your side, teaching your kids about money has never been more fun! 

 30 day free trial blog banner

 

Quote

Read the T&Cs, FSG, PDS and TMD at heykit.com.au/legal and consider if Kit is right for you. Issued by Hay Limited. Fees and charges may apply. Any advice given is general in nature. 

Bbooks

Featured

Kit Wins Big: Celebrating our 2024 Finnies and WeMoney Awards

Kit Wins Big: Celebrating our 2024 Finnies and WeMoney Awards

June 14, 2024
Prepaid card vs debit card vs credit card. Which is the right card for my kid?

Prepaid card vs debit card vs credit card. Which is the right card for my kid?

May 28, 2024
How finance expert Michelle Bowes teaches her kids about money

How finance expert Michelle Bowes teaches her kids about money

May 21, 2024
How to teach your kids about the true cost of buying stuff

How to teach your kids about the true cost of buying stuff

May 7, 2024
Teaching Kids the Value of Delayed Gratification at Home

Teaching Kids the Value of Delayed Gratification at Home

April 29, 2024
Top Three Benefits of a Pocket Money App

Top Three Benefits of a Pocket Money App

April 3, 2024
Why you should give your kids a regular “PayDay”

Why you should give your kids a regular “PayDay”

February 21, 2024
Gamification: How quizzes and rewards could teach kids about money

Gamification: How quizzes and rewards could teach kids about money

February 7, 2024
Top 5 tips for helping your kids to save money

Top 5 tips for helping your kids to save money

January 16, 2024
Independence and Responsibility: 10 Great Chores for 10-Year-Old Kids

Independence and Responsibility: 10 Great Chores for 10-Year-Old Kids

November 10, 2023
8 Age-appropriate Chores for Energetic 8-Year-Olds

8 Age-appropriate Chores for Energetic 8-Year-Olds

November 3, 2023
9 Best Chores for 9-Year-Old Kids

9 Best Chores for 9-Year-Old Kids

October 26, 2023
Introducing Kit Money Quests: How AI and gamification could help, shows research from Kit

Introducing Kit Money Quests: How AI and gamification could help, shows research from Kit

October 9, 2023
Money talks: Financial words parents and carers should teach their kids

Money talks: Financial words parents and carers should teach their kids

June 29, 2023
Two cents from Yish Koh

Two cents from Yish Koh

June 19, 2023
Kit, built by CommBank proves pocket money apps can help build financial capability in kids as young as six

Kit, built by CommBank proves pocket money apps can help build financial capability in kids as young as six

April 26, 2023
Container deposit schemes: Let them return it to earn it

Container deposit schemes: Let them return it to earn it

April 21, 2023
Decorate an Easter egg and find out your money personality

Decorate an Easter egg and find out your money personality

April 5, 2023
How to teach your kids the difference between needs and wants

How to teach your kids the difference between needs and wants

March 24, 2023
Kit Answers: How long does a transfer to my kid’s Kit Account take?

Kit Answers: How long does a transfer to my kid’s Kit Account take?

March 2, 2023