Debit Card For Kids? PayPal’s Banking On It

What's Hot


How to Cut the Cable TV Cord in 2017Family

8 Major Freebies and Discounts You Get With Amazon PrimeSave

8 Creative Ways to Clear ClutterAround The House

Study: People Who Curse Are More HonestFamily

This Free Software Brings Old Laptops Back to LifeMore

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

The 3 Golden Rules of Lending to Friends and FamilyBorrow

6 Reasons Why Savers Are Sexier Than SpendersCredit & Debt

Resolutions 2017: Save More Money Using 5 Simple TricksCredit & Debt

Porta-Potties for Presidential Inauguration Cause a StinkFamily

Protecting Trump Will Cost Taxpayers $35 MillionFamily

7 New Year’s Resolutions to Make With Your KidsFamily

5 New Year’s Resolutions That Will Pay Off 10 Years From NowCollege

10 Tasty Alcohol-Free Drinks That Adults Will LoveFamily

10 Simple Money Moves to Make Before the New YearFamily

Could Your Pet Benefit From Marijuana-Laced Treats?Family

Got a kid heading to college in the fall? Now that credit cards are harder for young people to get, here's a potential solution.

Now that credit cards are fading as a campus spending source (see No More Extra Credit on Campus), parents are reaching for a way to put plastic into the hands of their kids.

PayPal may have found it.

PayPal’s “Student Account” functions like a normal PayPal account with one major difference: Other accounts can be added to it. It also comes with a debit card. However, unlike other PayPal accounts, this one isn’t linked to any outside checking accounts. Instead, all transactions flow through the parent’s PayPal account. The parent can set restrictions on spending and access to online purchases, plus view transactions by the student.

Mom and Dad can also make cash transfers via a new Apple iPhone application.

Here, directly from the PayPal website, is how the debit card program works:

  • Teens get an actual debit card (with their own name on it) that they can use anywhere Debit MasterCard(R) is accepted.
  • Anyone 13 years or older can have one if a parent opens an account.

The company is also pushing the control issue on student banking, offering these benefits to parents:

  • They can see everything that happens with the account, and even get low balance and high-spending alerts.
  • Only the parent can open a student account for the teen.
  • The teen can’t spend more money than the parent puts into the account.

The account is free except for a $1-per-transaction ATM fee. And there are no worries about overdrafts. If Junior tries to spend money that’s not in the account, the transaction is simply declined at the point of purchase. Try that in the real world, and the purchase might go through – with a $36 overdraft fee on the back end. (At least until August: see Time to Choose: Declined Card or Overdraft Fee?)

The PayPal Student Account doesn’t actually link to a teen’s bank account, if he or she has one. That means in order for the student to make a deposit, the money will have to go to mom and dad first. But if you’re looking for a safe “controlled” banking experience for kids and one where parents can manage their kids’ spending from afar, this one may be just the ticket.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: Got a 401(k)? Here Are 2 Changes You Need to Understand

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,900 more deals!