It’s not always easy teaching children to be financially responsible when sites like PayPal prohibit anyone under the age of 18 from using their services. Fortunately, there are many financial alternatives to PayPal that you can use to teach kids how to save and manage money.
Some of the best PayPal alternatives for minors put you in control of custody, which means you can monitor how your kids are doing and intervene if you see them getting into trouble. Consider the following options to get started.
Why does PayPal have an age limit?
A few years ago it was possible to set up a PayPal student account, but this service has been discontinued.
Corresponding PayPal websitePersons under the age of 18 are not permitted to open an account regardless of their location:
“If you are an individual, you must be a resident of one of the countries/regions listed on the PayPal Worldwide page and at least 18 years of age or the legal age in your country/region to open a PayPal account open and use the PayPal services.”
But PayPal isn’t your only option. Feel free to learn how to fully use PayPal, but there are several other banks and financial services providers that circumvent this age restriction by offering youth accounts linked to parental custodian accounts. Some of them are free and do not require a minimum balance.
Online banking accounts for teenagers
Opening a checking or savings account for your children can be a good opportunity to teach them about budgeting and other aspects of personal finance. After all, they don’t get the chance to learn these things in school.
If they have their own bank account, they may find it easier to save for the future and set financial goals. Your children will also learn the value of maximizing their savings.
Since you can no longer set up a PayPal student account, you must look for alternative options. One solution is to open a custody account and leave it to him when he turns 18. In the meantime, you can keep an eye on his account activity and help him make informed decisions.
Capital One Money is a fee-free checking account for children and young people between the ages of eight and 18. It requires no minimum balance and includes free online and mobile banking.
Here’s what you get when you register for an account:
- No monthly fees.
- A free Mastercard debit card.
- A joint account with mobile app credentials for parents and children.
- child lock
- Deposit checks with the Capital One Mobile App.
- Access to over 70,000 toll-free ATMs across the country.
- Accounts earn interest (0.10 percent annual percentage return).
A real bank account puts your teen on the path to understanding how banking works, how interest accumulates when he saves money, and how to manage his finances from month to month.
Since the account comes with parental controls, you can always step in and help your teen. There is also an option to transfer money from your own bank account to and from his account.
Other online banking alternatives
Capital One isn’t the only company getting into the teen banking game. A few other banks have agreed to help with student bank accounts.
- Bank of America Student Banking: No monthly maintenance fees (for eligible students), online/mobile banking, zero liability guarantee, and the ability to make mobile check deposits.
- alliance: Available for children aged 13 to 17. Open a joint account for your child with no minimum balance, no monthly fees, online/mobile banking, and interest rates more than double that of other teen bank accounts.
- Chase high school review: For students ages 13-17, a “high school checking account” is available with no monthly fee when linked to a parent’s bank account. Chase usually has ATM and overdraft fees, but this is a good opportunity to teach your teen how to avoid those “big bank” fees.
- Huntington bank: Children and young people under the age of 18 can register for a checking account as long as someone over 18 is willing to open it as a co-signer or as a joining account. Huntington Bank does not provide account details online, so be sure to read the fine print when signing up.
- Wells Fargo Clear Access Banking: If your teenager is between the ages of 13 and 16, you can open a checking account in their name. This option requires a minimum deposit of $25 and a monthly fee of $5. Account holders can make mobile deposits, withdraw cash from over 13,000 fee-free ATMs nationwide, and pay their bills online. Your teen will also receive a contactless debit card with no liability protection.
National banks are not the only ones offering student accounts. Your local bank or credit union may also have some options for students. Check out their website or give them a call to see what’s available.
Prepaid debit cards for teenagers
A prepaid debit card is one of the best PayPal alternatives for minors. This option gives your teen access to a limited amount of money for daily expenses or emergencies. Also, you don’t have to worry about opening a bank account.
You can stop at any pharmacy or supermarket and buy a refillable prepaid card for your child, one of many ways to give money away.
American Express Bluebird is a cross between a bank account and a credit card.
The cool thing is that each “Family Account” contains up to four prepaid cards for other family members. You can quickly transfer money from your central account to these cards, set spending limits, and monitor your teen’s account activity.
It’s probably one of the best solutions for parents who want to hand out allowances to children and teach them about credit card stewardship.
An even simpler solution is a vanilla prepaid card, available at Walmart and other supermarkets.
Young people under the age of 18 cannot buy these cards. However, parents must purchase the card, sign the agreement, and then add the minor as a registered user.
Some features of the MyVanilla Card include:
- A mobile app for checking and managing your account.
- Choose between Visa and Mastercard.
- Make free direct deposits.
- Transfer money between MyVanilla Card accounts.
- No credit check required.
- Visa cards do not have liability protection for unauthorized transactions.
Note that this service is not available in Vermont. The standard ATM fee in other states is $1.95 per transaction. If your teen uses the card while traveling abroad, they’ll pay $4.95 per cash withdrawal.
One of the easiest ways to manage multiple accounts from a single family management platform is FamZoo.
This service is like Bluebird on steroids. It offers everything that the American Express Bluebird account offers, including a prepaid card for each child. What it lacks, however, are most of the fees you’ll find when signing up for a student account with one of the major banks.
The best feature here is the automation. You can set an allowance amount for each child and then have the money automatically transferred to their cards at any interval you want.
Users can also set savings goals, request money, split payments and create separate accounts for different purposes – all from one platform. For example, you could encourage your children to set up a savings account and another for donations.
You can even link scheduled tasks and jobs to payments or penalties. This is a great way to teach kids about the connection between work and income.
If you’re a really strict parent, you can set up a “billing” where you charge your kids their share of cell phone bills and other expenses!
4. Google Pay
Google Pay (formerly Google Wallet but now combined with Android Pay) is an interesting alternative to PayPal.
It is available to any teenager over the age of 13 as long as a parent gives permission and accepts the terms. After that, parents can connect a debit or credit card to the Google Pay account to transfer money to it.
There are no frills. It’s probably the easiest and most affordable way to give your kids a place to save and spend their money. Google Pay users can easily share their spend with friends or family, transfer money online, and make group payments.
You can even store your other credit or debit cards in one place for easy access. The good news is that many merchants these days accept Google Pay without the need for a credit card.
Teaching children financial responsibility
Learning to be financially responsible is not easy. Unfortunately, schools don’t teach it. So it is up to the parents and families to provide their children with a solid financial education. Opening a checking or savings account for your child can be a good place to start.
And if they want to learn more, there are several ways kids can make money online. This is a good first step in building good financial health.
This article was previously published on Source link