Why and when your child should have a debit card

Many children learn to save by stashing cash in a piggy bank or jar, then graduate to a basic savings deposit account. But as teenagers, they start to spend more — lunch while on a field trip, a movie with a friend — and may need an account that lets them make purchases with a debit card.

A variety of options are available, including traditional checking accounts with debit cards, as well as prepaid debit cards, that parents can manage jointly with a child. The cards give children control over their own cash but allow parents to monitor the spending and offer guidance as needed.

You can start by asking if your own bank or credit union offers an option for joint accounts with teenagers, said Laura Levine, chief executive of JumpStart Coalition, which promotes youth financial literacy.

Some institutions don't permit minors to have debit cards under their own name until they are at least 16, but others offer them to children who are 13 or even younger.

Parents should look for features like no or low fees for funding and maintaining the account, online account monitoring, convenient ATM access and the ability to set spending limits.

USAA offers a "Youth Spending" account, available to children 9 and older, when their parents open the account. Children have their own debit card, but parents can check spending online or on a mobile app.

Parents can also set spending limits and receive text messages if their child exceeds them.

The financial website NerdWallet recently recommended several accounts for teenagers, including Alliant Credit Union's Free Teen Checking and Capital One 360's Money account.

Sean McQuay, a card expert with NerdWallet, said he generally preferred a checking account with a debit card for teenagers, rather than a prepaid debit card, because the checking account could be linked to a savings account, reinforcing the habit of setting money aside for longer-term goals. Some prepaid cards offer the ability to sequester funds, he said, but the money usually doesn't earn interest.

Some prepaid cards, however, can work well for youngsters. Consumer Reports recently gave a top ranking to Bluebird from American Express, which offers family accounts. The main account is opened by an adult, who can give additional debit cards to up to four family members ages 13 or older. Parents can monitor the accounts online, set spending limits and restrict access to ATMs if they choose.

When deciding what account to open, it is wise to consider how the child will need to use it, said Christina Tetreault, a staff lawyer specializing in financial services at Consumers Union. A college student will probably want to be able to pay bills online, she said, but a high school student mainly interested in shopping at the mall or online can probably do without the bill-paying function.

Make sure to read the fine print with any prepaid card. Some may charge fees for speaking to a customer service representative or charge for loading funds onto the card. New federal rules scheduled to take effect next year will require all prepaid cards to disclose fees and other details more clearly, Tetreault said.

Q: What is the right age to open a spending account for my child?

A: Children vary in the speed at which they learn to handle money responsibly, Levine of JumpStart Coalition said. Some may be ready in middle school, while others may not be until high school or later. Generally, however, it is better to let them make mistakes under a parent's tutelage, she said, than to wait until they are on their own, when the financial impact is greater. It is equally important, she said, for parents to devote the time necessary to monitor the account.

Q: Should I link my child's checking account to a savings account?

A: Having an account separate from the one for spending can help encourage saving for specific goals. But Patricia Seaman, spokeswoman for the National Endowment for Financial Education, advises waiting a while before linking the two accounts, to make sure your child has the discipline to leave the money in the savings account alone.

Q: What about overdraft fees?