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Resources > Education Center > Kids’ Allowance Card—Uses, Benefits, and Popular Options

Kids’ Allowance Card—Uses, Benefits, and Popular Options

Cashless payments have seen exponential growth in the last decade and are steadily becoming the new norm. There’s a high chance your child is at least aware of debit cards, even if they’re young, and they may have shown interest in obtaining one.

In this case, replacing cash with a kids’ allowance card can be a good decision. This article explains how your child can benefit from such cards and gives examples of cards that let children take on more responsibility for their personal finances.

What Is an Allowance Card for Kids?

When talking about children’s allowance cards, people typically refer to prepaid cards. While they may seem similar to traditional debit cards, prepaid options have two significant differences:

  1. They’re not connected to a bank account
  2. They often have lower age requirements

Instead of a checking account, your child only receives a card that you load with funds. The vast majority of options are reloadable, but you may find single-use cards if you need one for a specific purpose, such as your child’s school trip.

The parent has full control of the card, which is why such options are more available to young children than standard debit cards. Some providers don’t have any age requirements, while those that do typically have low thresholds (5–6 years).

The main benefit of a prepaid card is that it gives your child more—but not too much—freedom to manage their finances. They can develop healthy spending habits while you retain control over the card to help them stay on the right path. You can do this through numerous parental control measures, such as:

  • Spending limits
  • Chore-based allowances
  • Restrictions of specific vendors and purchase types

The exact controls and other features depend on the provider. There are plenty of options to explore, so thorough research can uncover the ideal solution for your child’s needs.

What To Look for in Prepaid Cash Cards for Kids

Prepaid card providers add lots of bells and whistles to their solutions to outcompete one another. This can lead to analysis paralysis and make it hard to focus on the right selection criteria. 

While browsing different options, you should assess five main factors:

  1. Loading and payment options—Besides direct deposits, your child’s card should support different transfer types like peer-to-peer sharing and cash deposits. Pay attention to the fees related to such transactions, as some providers charge hefty ones
  2. Financial education tools—Prepaid cards typically come with mobile apps that let your child manage their money. Look for options with robust education tools like financial literacy resources, savings options, and goal-setting features
  3. Monthly fees—Most prepaid cards come with monthly fees, which can add up with time. Look for options that either have low fees or high value for money
  4. ATM network—Your child will likely make frequent withdrawals, so your card provider should have a wide network of fee-free ATMs
  5. Parental controls—A prepaid card should teach your child to manage their money under close supervision, so make sure your solutions can prevent reckless spending and other common issues 

Best Money Cards for Kids—Three Options To Consider

If you’re not sure where to start your search for prepaid cards, the following options are worth checking out:

  1. Bluebird by American Express
  2. GoHenry
  3. FamZoo

Bluebird by American Express

Source: Bluebird

If you’re looking for a budget prepaid card stripped down to some basic financial management features, Bluebird can be a good choice. It has no monthly fees, and getting started is free if you create an account online. The card also supports free withdrawals on over 37,000 ATMs, so your child can save up quite a bit.

Bluebird supports online bill paying, so it can be a useful tool for teaching your child how to make the necessary payments as they grow up. It also lets you track your child’s spending and set limits through the app.

The main drawback of this card is a lack of educational resources and tools. It’s not the best option for improving your child’s financial literacy beyond showing them the ins and outs of cashless payments. Bluebird is also unavailable in Vermont, so VT residents need to look for alternatives.

The following table summarizes the pros and cons of Bluebird:

No monthly fees
Free online registration
Large ATM network
No educational tools
Unavailable in Vermont


Source: GoHenry

GoHenry is a prepaid card combined with a full-fledged money management and education app. It’s a pricier option compared to some competitors, but it may be worth the money thanks to its many features, most notably:

  • Chore and allowance management
  • Merchant block, spending limits, and various other parental controls
  • Money Missions that teach kids about numerous aspects of personal finance, such as budgeting and credit 

The minimum age is six, so your child can start learning about money early in life. Obtaining a card for one child costs $4.99/month, and you have to subscribe to a family plan at $9.98/month to add up to four children. 

You can compare GoHenry’s benefits and drawbacks in the following table:

Various educational resources
Chore management
Low minimum age
Slightly pricey
Can only add up to four children


Source: FamZoo

FamZoo is a versatile prepaid card that focuses on learning through practice. While it may not have an extensive educational library like GoHenry, it’s packed with features that let parents teach children the value of money and wise financial decisions. Such features include the following:

  • Splitting accounts into categories for different purposes (saving, spending, investing, etc.)
  • Automated allowance and chore charts
  • Informal loans with parent-defined interest rates
  • Parent-paid interest for encouraging your child to save

These features somewhat make up for the lack of strict parental controls. While you can keep close track of your child’s spending, you can’t block specific merchants or purchase types—your child can use the card wherever Mastercard is accepted.

Age requirements are also not ideal, as your child needs to be at least 13 to register for the account.

The following breakdown shows FamZoo’s main pros and cons:

Dedicated account categories for different purposes
Lots of automated features
Parent-controlled loans 
No advanced parental controls
Only available to children who are 13 and over

How To Use Money Cards for Kids To Prepare Your Child for Adulthood

Prepaid cards are an excellent way to make your child a more responsible spender and instill the necessary financial habits they’ll need throughout life. They also help you get the child ready for other financial products, such as credit cards.

You can simulate the relationship your child will have with lenders to help them learn the importance of meeting their obligations timely. Doing so will lower the chances of your child making costly mistakes that can damage their credit score.

Your child has plenty of time to learn, as they won’t have access to independent credit products before becoming legal adults. Even then, they might have to wait a few more years because the CARD Act of 2009 made it difficult to obtain credit cards before turning 21.

Besides overcoming these limitations, your child should have a strong credit profile to obtain loans without complications. This is something a prepaid card can’t help with, as activity related to it isn’t reported to credit bureaus. Luckily, there’s another product that can build your child’s credit and set them up for a more stable future—FreeKick.

Establish and Build Your Child’s Credit Profile With FreeKick

Powered by Austin Capital Bank, FreeKick builds credit for children ages 14–25. The product combines a Federal Deposit Insurance Corporation-insured (FDIC-insured) deposit account with additional services to help parents make their children’s adulthood easier.

The whole process is automated and happens in three steps:

  1. Make a DepositCreate your account by selecting a plan based on an FDIC-insured deposit:
    • Free—One-time deposit of $2,500
    • $49/year—One-time deposit of $1,750
    • $99/year—One-time deposit of $1,000
  2. Set It and Forget It—FreeKick takes over and builds 12 months of credit history for your child through a no-interest installment loan
  3. Keep Growing—Renew the account to build up to 48 months of credit history for your child and help them save over $200,000 throughout adulthood

The credit history of legal adults (18 or over in most states) starts getting reported to credit bureaus after opening the account. If your child is 14–17 years old, FreeKick will report the credit history once they become legal adults. This is because credit bureaus don’t accept reporting for minors.

With this in mind, closing your FreeKick account while the child is still a minor means that no credit history can be reported on their behalf. You would still get 100% of your deposit back.

Enjoy FreeKick’s Credit Profile Monitoring and Protection (Coming Soon)

Leaving a child’s credit profile unmonitored exposes it to several risks:

One way to keep your child’s profile clean is to regularly reach out to the three major consumer credit bureaus (Experian, Equifax, and TransUnion). This can be time-consuming, though, so FreeKick offers various credit profile monitoring services to give you peace of mind.

Your child’s information will be safeguarded by the following services:

  • Social Security Number tracing
  • Dark Web monitoring
  • Full-service ID restoration
  • $1 million ID theft insurance
  • Neighborhood sex offender monitoring
  • Safety measures for young adults:
    • Lost wallet protection
    • Change of address monitoring
    • Payday loan monitoring
    • Court records monitoring

All of these services are included in your FreeKick account and don’t carry additional costs.

If you want to keep your child’s credit profile under expert supervision while boosting their creditworthiness, sign up for FreeKick

Featured image source: Karolina Grabowska