I've never had a debit card. I was brought up on cash--in my parents' generation, if you couldn't afford to pay cash for something, you didn't buy it. Checks were for bills and the mortgage (I never even owned my own checkbook until I started teaching). Credit cards were for special purchases, like Christmas presents and family vacations, and even then they were always paid off at the end of the month. My parents were frugal with their money, and though we kids never wanted for anything, we knew that budgeting was important.
Nowadays, I rarely use the checks, since a lot of my billing is done online, and I find myself having a hard time getting used to the idea that, according to the Engineer, I should be using a credit card even for the small things (like fast food drive-thru windows), rather than cash. That's because we earn frequent flier miles on our credit card, and it keeps our credit rating high since we don't carry any debt (we still pay off the balance every month, just like our parents did, because it's just common sense).
So I wasn't sure how I would feel about a debit card that's designed for teenagers, like Current, the new debit card from Discover.
My main reason for considering it was because times have changed since my parents' days. We still all need to know how to budget, but now credit and debit cards should be part of that education. And the sooner kids learn how to handle their finances responsibly, the better, especially when you consider that they will be inheriting a less-than-desirable economy from all of us.
There's lots of pros behind the Current debit card for teens that made me consider it seriously.
Account Management Features: As a parent, these are really helpful features! You can set spending limits and track your teen’s spending through online statements, e-mail and text message alerts. I really like that modern approach of making the account so accessible online. You can also limit certain categories for spending--I'm not honestly sure what I would want to limit, but it's there if you need it.
Teens with part-time jobs can also can load their paychecks onto the card through direct deposit, just like their parents do with their own checking accounts.
Advanced Security Features: Current is protected by Discover’s $0 fraud liability. If anyone tries to use your teen's card without authorization, you (or your teen) are never responsible for those unauthorized charges – online, offline, anytime, anywhere. If your teen loses their Current cards or the cards are stolen, the cards will be temporarily suspended or deactivated, and your teen will be eligible for an emergency replacement.
Financial Education Resources: This is a biggie, of course. We all want our kids to be educated consumers, make good choices, save money, etc. They can learn how to spend smarter by logging onto the Account Center at CurrentbyDiscover.com. There they can view helpful articles on topics such as basic financial concepts, protecting themselves from identify theft (which is more and more important these days!), starting a savings program, and making their money go further.
Current by Discover Card, by the way, is also sponsoring a financial literacy program across high schools nationwide, called the Money Smarts Program, designed to help educate high school juniors and seniors on basic money management skills.
Meaningful Rewards: If you are a Discover card user yourself, you already know they offer rewards, like their Cashback Bonus. Current Card Teens are eligible for members-only in-store coupons and online discounts when they use their card at select restaurants, movie theaters and teen-friendly merchants. What’s more, parents earn Discover Cashback Bonus or Miles when they load their teen’s Current Card using their Discover Card. Woohoo! Definite plus.
Oh, and they have some cool designs for the cards, too--check out the image, below.
What's the Catch?
All of those features definitely fall on the Pro side when considering the Current Card.In fact, there's really only one negative, and that's this:
It costs money to use this card.
Like I said, I don't have a debit card myself, so maybe charging for a debit card is expected, especially considering all the features offered, but the costs really do give me pause.
The costs are low--cardmembers pay a $5 monthly charge for each card (or save $10 by paying an annual fee of $50).
But they also only include four free ATM withdrawals per card per month, and I could see that being a problem. That's roughly once a week, which seems reasonable, but if a concert came up, or they decided to go see a movie, then the teens would be charged for using the ATM. That bothers me, charging them to access their own money.
Overall, there's a lot to consider when it comes to the Current debit card for teens. If you have a teen yourself, and you're considerig it, then in addition to my review, you'll probably want to check out the Current Card by Discover website to get all the details.
I'd love to hear your opinions--is this something you'd choose for your own teens? Leave your comments below (leaving a comment below means you'll also earn entries in my 2 latest giveaways--an extra entry to win the 70th Anniversary Edition of Pinocchio on DVD AND the Hello, Bunnies! Bunnytown DVD).