These include ATM cards, debit cards, smart cards and credit cards. Take a moment to explain the differences among them. Stress the importance of keeping track of all withdrawals, as well as any transaction fees, to avoid overdrawing the account. The money is withdrawn directly from your child's checking or pre-paid debit account, so usually there are no interest charges, although some financial institutions may charge fees for debit card use. Just like a standard ATM card, a debit card also allows cardholders to withdraw cash from their checking accounts.
Debit cards are safer to carry than a lot of cash and are more convenient than checks.
Advise your children to enter debit card transactions in their checkbooks and track their account balances closely to prevent overdrafts. Smart Card - These new forms of plastic store cash right on the card. They are typically used for small purchases, such as bus fares, laundry machines and parking meters. Since your children can spend only the amount of cash they've loaded onto a card, smart cards may help them stick to a budget. After the card's value is depleted, it can be replenished.