It’s now more important than ever to educate children on the importance of savings. Talking with them at an early age is critical for them to learn financial literacy. 69% of parents gave an allowance to their children (ages 4 –14) in 2019 at an average amount of about $10 a week. These children did a great job of not spending all of their money, as they saved nearly 42%, while their parents saved just 8% of their income!
Just speaking to your children about money isn’t enough. Parents should be leading by example. According to a 2019 T. Rowe Price survey, 46% of parents had no emergency savings. It’s important to practice what you preach. If you want your children to become good stewards of their finances, parents should do the same.
Gone are the days of the piggy bank. Today, kids can manage their finances with prepaid debit card apps that help them track their spending and offer customizable oversight features for parents. Kids can split their allowances into different pots – savings, spending, donating, etc. – and parents can set limits on ATM withdrawals.
Why Choose Hydrogen?
At Hydrogen, we make it easy for children to spend responsibly with prepaid cards for kids. Our debit cards are optimized to promote safe virtual spending and include innovative features that put parents in control, such as spend limits, automated allowances, and store restrictions. When you use Hydrogen’s financial technology solutions, you’ll enjoy all the benefits of efficiency and convenience in the palm of your hand.
Ways to Use Prepaid Debit Cards for Kids
Prepaid card programs for kids offer many practical applications for families with children. Parents can implement these debit cards into their households with their children’s best interests in mind, teaching them valuable life lessons and practices. Whether you’re looking to educate kids on financial responsibility or manage their allowances more efficiently, prepaid cards provide the perfect solution.
There are three primary reasons parents give their children prepaid debit cards:
- Provide real-world spending experience: Giving children hands-on experience with money is a great way to help them become familiar with how financial transactions work in the real world. Prepaid cards also adequately prepare kids to use standard debit cards in the future.
- Teach healthy financial habits: Many parents use prepaid cards to teach their children financial responsibility while they’re young. Educating kids on positive spending habits motivates them to budget and spend wisely when they’re older.
- Automate allowances: Prepaid debit cards allow parents to better manage their children’s allowances through automated deposits, so you’ll never forget to reward your kids for doing their weekly chores.
How It Works
As we have examined, prepaid cards are a new way to virtually spend money from a phone’s native wallet. They can be spent anywhere Visa or Mastercard are accepted. Since COVID-19 was introduced to the world, wallet spending has exploded as consumers shy away from cash, and merchants increasingly push digital payments in-store.
There has been an equal increase in the use of prepaid debit card programs for kids. One such example is an app called Greenlight. Using this card, parents can pick the exact stores where their kids spend money, approve and freeze any spending, get real-time spending, and automate allowances. There are dozens of companies launching similar programs.
Hydrogen’s Prepaid Card Programs for Kids
Offering a solution like Greenlight is simple on Hydrogen. First, get approved by one of our prepaid card partners, such as EML, Marqeta, Railsbank, and others. Next, Hydrogen offers a data categorization engine that allows you to label spending and set card controls for merchants and categories. Hydrogen also offers automated savings, goals-based savings, round up the change, overflow, and budgeting setting. These features can be added through our APIs or our no-code components UIs.
To start creating a prepaid card program for kids, click on the link below.
Benefits of Using Prepaid Cards for Kids
Children will likely use credit or debit cards in the future, so it helps to get them started while they’re still under your roof. Prepaid debit cards offer many unique benefits that you can’t get with cash, gift cards, or standard debit cards.
Applications such as Hydrogen’s prepaid card program for kids come with various personal and functional advantages that both children and parents can enjoy:
- Parental controls: Even though kids have the cards, parents have the power. Prepaid card programs allow adults to monitor their child’s spending, set limits, and freeze purchasing. Parents also receive real-time notifications every time their child uses the card to make a purchase.
- Safer than cash: A lost debit card is much easier to recover than cash. All you have to do is freeze the card, order a replacement, and transfer the balance onto the new card. If you find the original card, you can simply reactivate it.
- Convenient: You can load money directly into a child’s account from the convenience of your mobile phone, so you never have to make trips to the bank to withdraw allowance money.
- No overdraft: Children will never be able to spend more than what’s in their account, meaning there’s no risk of them overspending and racking up bills.
- Emergency funds: Prepaid cards are excellent resources for kids to have in emergencies when they don’t have the cash to spend.
Sign Up for Our Prepaid Card Program for Kids Today
Hydrogen’s prepaid cards for kids are the perfect solution to safe and simple spending. Our innovative program helps parents monitor their child’s financial transactions while providing them with a responsible way to explore their financial freedom.
Sign up for our prepaid card program today.