Kids & cashless businesses

[gac1979]

My daughter (11 years old) went to a sporting event with a friend (and friend’s parent) last night. Everything at the event (including food) was cashless. So, the days of simply handing a child $20 to take along are quickly winding down. What’s the best way to provide a small amount of spending money for events like this? Add her as an authorized user on a credit card with a low credit line? Maybe a PayPal account that can be used at the event on her phone?

[randomguy]

My daughter (11 years old) went to a sporting event with a friend (and friend’s parent) last night. Everything at the event (including food) was cashless. So, the days of simply handing a child $20 to take along are quickly winding down. What’s the best way to provide a small amount of spending money for events like this? Add her as an authorized user on a credit card with a low credit line? Maybe a PayPal account that can be used at the event on her phone?

Paypay? Is it like 2000:) Apple/Google pay would work if they have a phone. Banks also have debit cards for kids. There are also the prepaid cards but I sort of don't like them.

[PottedPlant]

Get your daughter her own credit card. She was the only authorized user.
We did for our 12-year-old in 1998.

[PersonalFinanceJam]

Does the child have any kind of bank account currently? Many banks/credit unions will let young minors be on a joint checking account with a parent which includes a debit card. Some, such as capital one, have pretty nice online controls for parents to keep track of what is going on.

[zie]

Some of these events tend to specify which payment platform they support, say Venmo only. Some are more open-ended events and support many different platforms. So you can't necessarily just add their phone to say your Venmo account.

So the best bet is to just give them a debit or credit card with a small limit, so they can add it to their own accounts on all the various payment platforms. Be careful with credit cards though, some of the payment platforms might charge the CC as though it's a cash advance, which is ridiculous, but I've seen it happen. Those transactions will be very expensive.

So I'd recommend a joint account with a small balance on a debit card at the same bank you normally use, so you can shift extra funds in a hurry if needed(unless you decide to give them a CC also).

Sadly it's still sort of the wild west for cashless transaction platforms still, perhaps over time we will see this become more interoperable.

[gac1979]

Get your daughter her own credit card.
We did for our 12-year-old in 1998.

I like this idea the best. Credit cards are far superior to debit cards imo, so this is probably a good time to start teaching that responsibility.

[Boglenaut]

Get your daughter her own credit card.
We did for our 12-year-old in 1998.

I like this idea the best. Credit cards are far superior to debit cards imo, so this is probably a good time to start teaching that responsibility.

Our daughter is an authorized user. We are told this will also have a very small positive impact on her credit score someday (can anyone verify?)

Also, it is helpful if the statement shows spending by person. We have one card that does this and one that just mixes it together. It is a lot easier to settle up with her monthly because her card segregates the charges.

[cubs1999]

Get your daughter her own credit card.
We did for our 12-year-old in 1998.

I like this idea the best. Credit cards are far superior to debit cards imo, so this is probably a good time to start teaching that responsibility.

Our daughter is an authorized user. We are told this will also have a very small positive impact on her credit score someday (can anyone verify?)

Also, it is helpful if the statement shows spending by person. We have one card that does this and one that just mixes it together. It is a lot easier to settle up with her monthly because her card segregates the charges.

It depends on if the card reports on the authorized users credit report. Not all of them do, but I know Chase and BOA report authorized users. It will help bc if you added them to both Chase and BOA,.for example, in ten years the child would have two 10 year old cards with presumably perfect payment history and larger limits on their credit report versus someone just starting with zero cards (or one they just opened) with a small limit.

[lthenderson]

Get your daughter her own credit card.
We did for our 12-year-old in 1998.

I like this idea the best. Credit cards are far superior to debit cards imo, so this is probably a good time to start teaching that responsibility.

+1 This is what we do with our daughters.

[CAsage]

It was "generation" shock to me as well to learn that our kids never used/needed cash. We opened teen debit accounts at our CU, linked to easily fund, and they got Visa debit cards. This allows the invaluable lesson of having a declined purchase when funds were exhausted. When they got old enough, also provided a Dire Emergencies only credit card, for which they were authorized users. The debit account (quaintly and oldfashed called a checking account - what's a check?) was also useful for their first job, and transitioned to separate at age 18. It was not my experience that a minor could open their own credit card - with no income and no credit history? Many options....

[DoubleComma]

Get your daughter her own credit card.
We did for our 12-year-old in 1998.

I like this idea the best. Credit cards are far superior to debit cards imo, so this is probably a good time to start teaching that responsibility.

If I recall, when we encountered this a few years ago we couldn't make our kids authorized users until they turned 13. It was the same age for our kids to get debit cards, opposed to ATM cards, with our credit union. Ultimately for the year or two before they turned 13 we simply handed them one of our CC to use for the event. Most of these cashless places never look at the card, its tap and go, so the name on the card didn't really matter.

If we were doing again today, we would most likely set up Apple Pay with our card on their phone. Not sure if your kid has a smart phone yet, if not digital currency might not work for you.

Once they turned 13 we got them set up on debit cards. and now several years later, each month I provide them their "allowance" via Venmo and they transfer it to their account. We are a very budget driven family, so in additional to the small amount of money they earn for household chores we also transfer them their individual clothing budgets as well as any money we have set aside for their sports activities. This has put them in charge of their own finances and has taught them the need to make good spending choices and to carry some money over from month to month when they want to make a larger purchase.

[lazydavid]

We recently made our 16 yo an authorized user on my Amex account. Every transaction is flagged with his initials, so it's easy to see which charges are his. He shares our $35k revolving limit (and whatever our undisclosed "spending limit" is), but is very responsible so I don't have a problem with that.

[Hoosier CPA]

We usually just send one of our seldom used credit cards with our kids and cross our fingers they don't lose it. I don't like this solution. I definitely don't want to send a debit card though.

[sco]

We recently made our 16 yo an authorized user on my Amex account. Every transaction is flagged with his initials, so it's easy to see which charges are his. He shares our $35k revolving limit (and whatever our undisclosed "spending limit" is), but is very responsible so I don't have a problem with that.

Amex lets you set each authorized user to a portion of your credit limit. So you can cap the kids at 2-5k if you want to...

[SchruteB&B]

Our daughter is an authorized user. We are told this will also have a very small positive impact on her credit score someday (can anyone verify?)

When my children were 16, I made them authorized users on my Capitol One Quicksilver card. By the time they were 18/19 they both had good credit scores ( I think my youngest had an 800) based solely on being an AU on my card.

[JoMoney]

For sure there are some cashless businesses, but it's far from the norm. There are still "cash only" businesses as well. For the places I go, cash is still far more widely accepted than phone app based payment systems. I would probably start the kid with a bank account and debit card.

[gac1979]

For sure there are some cashless businesses, but it's far from the norm. There are still "cash only" businesses as well. For the places I go, cash is still far more widely accepted than phone app based payment systems. I would probably start the kid with a bank account and debit card.

I’d agree it isn’t the norm if looking at the whole ecosystem of businesses. However, it is the norm when looking at the common places teenagers will go. Concerts = cashless, professional sports events = cashless, and high school events/games = cashless.

[lazydavid]

We recently made our 16 yo an authorized user on my Amex account. Every transaction is flagged with his initials, so it's easy to see which charges are his. He shares our $35k revolving limit (and whatever our undisclosed "spending limit" is), but is very responsible so I don't have a problem with that.

Amex lets you set each authorized user to a portion of your credit limit. So you can cap the kids at 2-5k if you want to...

Good info, will look into that.

[Nowizard]

+2 on getting children on a credit card or their own. It definitely begins to establish a credit rating that pays off.

Tim