How to choose between prepaid debit cards for kids

Let’s find out more about how these tools can help your child discover the value of money or benefits of saving.

• What is a prepaid debit card?
• Why choose a prepaid debit card for kids?
• What are the pros and cons of prepaid debit cards for kids?
• Are prepaid debit cards safe?
• Five handpicked prepaid cards for kids
• Calculating financial independence

What is a prepaid debit card?

A prepaid debit card is not connected to a bank account like a regular debit card is, and it has no link to credit. It is preloaded with money via a bank transfer, and once that is spent, there are no overdraft facilities available.

They are simple to use and obtain compared to other cards. A good way to describe them is ‘pay as you go’ as they function similarly to mobile phones topped-up with credit.

Depending on your requirements there are many prepaid debit cards on the market. Some are primarily used as currency prepaid cards for overseas travel, many people use others as a budgeting tool. The number of bank cards for kids is also increasing in line with the western world’s move to a cashless society.

Why choose a prepaid debit card for kids?

Prepaid debit cards designed for kids offer convenience for both parents and children. They are helpful for younger children who may just be starting to need or want some financial independence - or for older children who are not ready for their own bank account. With more retailers opting to go completely cashless, they also have a wider usage than paper money or coins.

Some banks have an age restriction on their bank accounts for kids. However, prepaid debit cards can be used by children as young as six.

What are the pros and cons of prepaid debit cards for kids?

Parents retain more spending control with prepaid debit cards for kids. That’s because they can offer a range of checks, from getting text notifications whenever a transaction is made to limiting the total amount that can be spent.

Instant transfers can be made into prepaid cards from the parents’ bank account. The apps that come with prepaid debit cards for kids also provide more convenience and useful features. These cards are a good way of teaching children the fundamentals of finance, but their very nature means they do have limits. If your child is older, perhaps has a Saturday job and is ready to go it alone, there are many bank accounts for teenagers, which could be a more suitable and long-term option.

Another con to consider with prepaid debit cards for your child is that they usually come with a charge, either monthly fees or sometimes a cost for certain transactions. Some cannot be used at cash machines to withdraw money, and others require the parent to have a current account with that banking provider. Bank accounts for kids generally are not limited in these ways.

Are prepaid debit cards safe?

Prepaid debit cards are not usually linked to a bank account like regular debit cards. They must be preloaded with money in order to function.
Parental controls also limit how much children can spend and, in some cases, even where they can spend it.

A card is also safer than cash. While bank cards for kids can still be lost or stolen, you are much more likely to get the money back with a card. In some cases, you can even freeze the card immediately to stop it from being used until a replacement card is obtained.

However, so-called ‘e-money accounts’, which include prepaid cards, are not protected by the Financial Services Compensation Scheme. This scheme protects customers’ money if a provider goes into administration. Read our expert guide on prepaid cards: how safe is your money for further information.

Five handpicked prepaid cards for kids

We’ve waded through all the key information to pick our top five prepaid cards for kids as of October 2022. And here they are, presented in order of lowest cost to the highest cost.

1. HyperJar Kids Card is a completely free app and prepaid debit card for kids aged six plus. It can’t be used at cash machines. It allows parents to put money in different 'jars' to sort your child’s spending and to save money.

Retailers can be linked to specific jars, and when the money is spent, it automatically comes out of the right place. You can also set spending permissions and limits on each jar separately.

Costs: Free

2. NatWest Rooster Money card can also be used at cash machines. However, there are some transaction charges which also apply, see costs.

Kids can build their own pots to save towards and view their spending habits via statements. Parents can decide where the card can be used, provide instant top-ups, and get instant spending notifications. Children aged over six can use it.

Costs: £1.99 a month and 50 pence each time transaction limits of 15 spends a day or 25 spends in seven days are breached.

3. Nimbl Pocket Money Card is an award-winning app and prepaid debit card for children over six. It has a handy micro-savings feature where youngsters can put away between 5 pence and £5 every time, they use the card to get them into the habit of saving for a rainy day.

When it comes to birthdays or Christmas, family or friends can also transfer money to the card. Automated pocket money, spending controls and alerts are also available.

Costs: £1.99 a month 

4. The Starling Kite card is slightly different to the other cards mentioned here, as it is connected to the parent’s bank account. It allows parents who already bank with Starling to build a child’s account into theirs. This means at least one of the parents will need to be a Starling Bank account holder.

As a result, money added to a Kite card is covered by the Financial Services Compensation Scheme, unlike other cards on the market. However, it is like a prepaid card in that money must be preloaded before it can be used - making this card more like a "prepaid debit card."

Features include instant spending notifications, spending limits for types of transactions and the ability to lock the card instantly. Parents can set a daily card transaction limit, a limit per transaction and a maximum number of card transactions in a day. Children must be aged six or above. 

5. Go Henry Kids Debit Card and App is an established and award-winning kids’ prepaid debit card for children over six. Parents can set up weekly chores for their children on the apps and then pay them once the task is complete. They can also set up weekly ‘pocket money’ transfers, which occur automatically afterwards. The app offers your child the opportunity to learn about money through games.

The card can be used at cash machines and be customised with a child’s first name.

Costs: £2.99 a month plus a 50p charge for top-ups after the first free top-up.
Find out more about all types of prepaid cards, not just those for kids, with our prepaid cards comparison tool, including details on how to apply.

Calculating financial independence

It’s never too early to teach your children about money management and saving. Research has shown that financial literacy is still insufficient in the UK, and most people believe school did not prepare them for financial life.

When used correctly, pocket money can start to do this and educate youngsters on the connection between work (chores) and financial reward. But only parents can decide if their child is ready for the responsibility of a children’s bank account. It is a big step to take as a family, which must be considered fully.

A prepaid kids debit card is just one of the useful tools which can play a part in the long journey to financial independence.

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