Often we come across situations where giving our debit card to kids becomes unavoidable. They may have to pay for something at school and we’re out of cash. Or we send them to buy something and wish to shop cashless. And where they need to make an online payment.
Nowadays, add-on or supplementary cards for family members are available from banks for a nominal charge. Yet, whatever our family members spend is debited from a single account only.
Unless every family member is aware and keeps astute check over spending, the household can run out of money much before payday.
Therefore, what should your kids know before using your debit card? There’re several things that you need to teach them before as much as handing over your debit card.
What Kids Should Know About Debit Cards
There are several things your kids should know about your debit card before you hand over for use. These involve safe use, spending and lots more.
Features of Your Debit Card
Teach your kids about various features of your debit card. Tell them the embedded chip contains your personal information. Hence, that’s the most important part of your debit card. The chip shouldn’t get damaged due to rough use.
Next is the magnetic strip on the reverse that shopkeepers often swipe to make a debit when you pay for purchases. This magnetic strip also contains some encoded information.
Damaging the magnetic strip can render the debit card useless. Meaning, you’ll have to spend a little money on replacing one.
Numbers on Debit Card
The typical 15-digit to 19-digit number on your debit card contains lots of information. The first six digits indicate the issuer such as Visa, MasterCard or Discover, among others.
These are known as the Issuer Indication Number or IIN. The remaining digits identify your bank and personal account number. However, these are encrypted.
Hence, if a debit card falls in wrong hands, chances that someone will know your account number are almost zero.
The most important are three digits that appear next to the magnetic strip on reverse of your debit card. They are known as the Card Verification Value (CVV) number or Card Security Code (CSC).
Even if someone copies your debit card number, it cannot be used for an online purchase without the CVV. The CVV or CSC is printed on at the reverse of the card often on the signature strip.
Since the CVV/ CSC is extremely important, tell your kids to handle the card carefully and take care to ensure the three digit code isn’t copied by someone.
Radio Frequency Identification Cards
Radio Frequency Identification Cards or RFID cards are also known as Contactless Cards. This means, they work on radio frequency to connect with a Point of Sale (POS) machine or ATM. Swiping or insertion isn’t necessary. These cards are generally safer to use since contactless cards have to be held close to the machines for any transactions.
However, these cards aren’t free from frauds such as theft of card number and CVV/ CSC.
At the same time, leaving an RFID or contactless card near a POS can result in wrongful debit from your account. If another customer is paying with a regular card and your RFID card is near the reader, chances are that the amount would be billed to your account. Unless the cashier is alert enough to detect the error.
Therefore, inform kids to keep away an RFID card the moment they complete a transaction. As I mention earlier, these are pretty safe cards to use.
Proper Card Handling
A lot of cards get damaged due to improper or poor handling. These include carrying in pockets without cover, exposure to moisture, food and drink stains as well as heat. A chip on the debit card and magnetic strip are most prone to such damages. Also, a debit card won’t work if it’s bent or has a crack.
Wrong insertion at ATMs and swiping in a rush also damage a debit card. All these factors can render a debit card useless and would need replacement. Therefore, teaching kids how to handle a debit card with utmost care is also as important as informing on spending limits.
Give a Spending Limit
Regardless whether you’re giving your personal debit card or supplementary one to kids, always limit the amount they can spend. Some banks provide the facility of setting a daily spending limit and even temporarily blocking a debit card to prevent overuse.
If your bank has such facility, set a daily spending and cash withdrawal limit. This ensures your finances remain intact and a single spend doesn’t throw the family budget out of gear. A debit or charge card isn’t credit card. Therefore, whatever you spend is instantly debited from your account.
Online spending on debit cards is most common. Understandable, since we live in the era of Amazon, eBay and Walmart among others. While spending online, alert kids to look for any hidden charges for using a debit card. Some merchants charge a fee when you use debit cards from specific issuers.
Also, never use a debit card from public computers for online shopping. If you forget to logout of a particular account, the debit card details including CVV/ CSC can be exposed to unauthorised persons.
At the same time, look for discounts that companies such as Amazon provide for using specific debit cards from specific issuers. If your debit card qualifies, you can get some discount and save money.
Charges & Fees
Debit cards come with different charges and fees. For example, lot of banks charge if you use a debit card more than three to five times at ATMs of other banks.
Such charges are applicable on all transactions, including printing a receipt or balance enquiry. Therefore, find out where your debit card won’t attract usage charges and instruct kids accordingly.
And ask them to be extremely cautious while buying from abroad with your debit card. Unless you’re aware of currency exchange rates, you might end up spending a lot more than what the stuff might cost when you buy locally.
The best way to teach kids about a debit card is to know various features and proper usage yourself. Replacing debit cards can prove expensive and takes time too. You can also opt for prepaid or gift cards to give your kids.
You can top them up with a certain amount of money when they need to use a debit card. That way, you’re protected from lots of risks and unwanted expenses.