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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308230  
Subject: Re: Add a Child to Our Credit Card Account? Date: 10/29/2013 7:32 AM
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Another possibility would be to open a checking account with a debit card in their name. The card would be able to be used anywhere a credit card is excepted but would be based on only as much money as they had in the account. You could make them responsible for keeping track of how much they had in the account as a beginning lesson in budgeting. You could then just transfer an amount from your account to their account whenever you wanted to.

I have to say that I really dislike debit cards, and refuse to use them for a variety of reasons, so I would much prefer giving a child a credit card than a debit card. With a debit card, you have to track each charge in the checkbook so that you know that you have enough money in there, and that's a lot of bookkeeping for me.

With a debit card, if there is an error, then they are taking money from your account. Yes, you will most likely get it back after the issue is resolved, but until then, you are out the money and could likely be bouncing checks leading to other fees. With a credit card, your money is not at risk if the card is compromised or there is an error. With my kids, they don't have much money in their checking accounts, so any chance of a wrong charge or fraud would really cause them headaches.

I don't think debit cards have the same protections as a credit card in the event of theft, but I think that varies by bank. Either way, I've never wanted to find out later that I misunderstood the policy or it changed. I'd much rather have the credit card company's money at risk than my checking account funds.

My kids got checking accounts at 16, and credit cards at 17. They finally got ATM cards to be able to get to money at college at 18, but these were ATM cards and not debit cards.

In the OP's position, I'd much rather have the credit card which has more protections and flexibility, and builds the child's credit rating.
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