Teens Get a Blank Check…
…but it’s a good thing.
One of the newest trends in banking (er, those that are still operating, anyway) is checking accounts especially for teens. The parent is co-owner of the account, and I say it’s about time.
Young people have been able to easily obtain credit for the past decade or more, even when they don’t have a job. I know, because I was one of them. The rickety little card table set up on the college campus quad informed me that I needed no income to get thousands of dollars in credit. I signed up without my parent’s knowledge, since I was an “adult,” and paid dearly for the tough economic lessons I learned through misuse of said card.
So something like this checking account sounds fabulous. It also offers a no-fee limited debit card with the parents setting the daily spending allowance, the use of online banking, as well as overdraft protection. Wells Fargo currently offers this product, as do some other smaller banks and credit unions. It is expected to become more widespread as parents across the land breathe a sigh of relief.
Messing up your credit when you are young and most likely inexperienced with money is NOT a rite of passage into adulthood. I’m tired of the ways that credit card companies manipulate and try to play “gotcha” with their most vulnerable customers in the form of high interest rates and confusing language. Because the long term effects of a bad credit rating can take years to erase, and having mommy and daddy rescue your in-debt butt is not the way to impart fiscal responsibility.
A checking account is clear cut. It is finite money without late charges and fees, and I wish they would have had them when I was younger. And (gasp!) it just might help them learn not to spend money they don’t even have. Something that perhaps certain adults could learn as well.
Although I do have a tip for those parents who have had to rescue their child from credit card hell. Make sure you have them pay you every penny back. Trust me, because I know from experience. After that initial roadbump, I never got into credit trouble again.
No disrespect, but how is this new? I had a checking account when I was 17, which was in 1980.
I think the new part is the limited debit card, as well as the online banking.
And, I think that you can be a lot younger than 17 to have this. At seventeen you are almost an adult. Thirteen, not so much.
In the part of Maryland I live in, teens can only get a savings account with a parent as a co-owner of the account. They have to be 18 to get a checking account. The savings account comes with a debit card, and teens have that account to deposit paychecks etc…but can’t use the debit card as a credit card. They can only really use it at ATM machines.
I have to admit I don’t understand the big difference between savings and checking accounts, as far as teaching fiscal responsibility goes. I had a passbook savings account growing up – by age 10 or so, I think. Nothing drove home the point of money being a limited resource quite like seeing my withdrawl stamped there in black-and-white.
When I did finally get a checking account, it was (in my mind) just a savings account without interest and a more convenient way to make withdrawls. I had to maintain a register instead of having a passbook stamped, but it was the same basic idea.
Does this not work in general? (Not being snarky – I’m aware that my personal experience is not a universal bellweather.
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@TeleriB- I know for myself, my savings account growing up was strictly for that, saving. I was never really allowed to take any money out. Yes, I had my passbook, but there were only deposit stamps in it.
A checking account is designed to have money deposited and spent on a regular basis, and I really like the idea of the parent-set ATM card. I know that they already have those, but I don’t think they actually tie into a checking account.
I’m really just for anything that can help teach kids fiscal responsibility while having them deal with real world situations. Like wanting to go a a movie and dinner, but only having so much left and having to make the decision as to what to do. It’s something I know I wasn’t exposed to at all. My dad just basically gave me however much money I asked for. Which was always more than I needed!
Might be a regional thing. I had a checking account at age 15 with my parents’ as co-signers. Checkbook, ATM card, overdraft protection and everything, decades ago. I agree it’s a good idea, and didn’t realize it wasn’t that widespread.
In Canada we use debit for everything, and this sounds like an AWESOME idea, since it will effectively prevent your 15-year-old from depleting his entire balance to get that cool dragon sleeve tattoo his little heart desires. I only wish bank accounts had been so nuanced when I was growing up. Mind you, to this day I enjoy the fancy coat and sapphire ring I bought at 16, but my mother did have kind of a heart attack when she heard my balance was zero heading off to University.
I’m really just for anything that can help teach kids fiscal responsibility while having them deal with real world situations. Like wanting to go a a movie and dinner, but only having so much left and having to make the decision as to what to do. It’s something I know I wasn’t exposed to at all. My dad just basically gave me however much money I asked for. Which was always more than I needed