Understanding the “Magic” of Debit Cards
Your kids see you paying for groceries, gasoline, and other purchases with your debit card, but do they understand that it’s not a magic wand for money? That it has limits of balance and budget? Here’s an example of how a “debit card” works that is relatable to children.
Brandon was super-excited. His mom was taking him to Chuck E. Cheese’s today! “Am I going to get a lot of tokens?” he asked his mom as they drove together. “I need a whole bunch so I can get a ton of tickets and win the best prize!” Mom just smiled. “You’ll have enough,” she said.
They pulled up in front of Chuck E. Cheese’s and made their way inside. While Brandon’s mom got busy in front of the token machine, Brandon checked out a few of the games and tried to find the best ones to start with. “Brandon,” mom called. She had finished paying and was holding out a card. Brandon took it from her, puzzled. “What’s this?” he asked. “Don’t I need tokens to play?” “Nope—you use this card,” mom explained. “You just scan it in front of the game you want, and it lets you play.”
Mom showed Brandon how to use the card, and he was soon off trying to win the most tickets he possibly could. Brandon had a great time playing arcade games—until his card stopped working.
“Hey, mom!” he called, running towards where she sat, working on her laptop. “My card’s broken! I need a new one!” Brandon’s mom quickly snapped her laptop closed. “There’s nothing wrong with your card, Brandon,” she said. “So why isn’t it working?” he asked. “Because you used up all the money I put on it!” “What do you mean?” Brandon was confused. Mom stood up and motioned for Brandon to follow her. She walked toward the machine she’d used earlier and started punching in numbers.
“I need to put money into the card in order for it to work,” she said. “It’s like a debit card.” “A what?”
Mom reached into her purse and pulled out a plastic card. “This is a debit card,” she said. “I have a checking account at the credit union. I put money into that account, and when I use this card, money comes out of my account. Do you understand?” Brandon nodded slowly. “And that’s sort of how this machine works, too,” mom continued. “In order for you to use the card, I need to put money onto it.”
“And when I finish that money,” Brandon said, “I can’t use the card anymore, right?” Mom smiled. “Exactly. Then we need to put more money into the ‘account.’”
Mom stuck her debit card into the card machine and punched a few numbers again. Then she took Brandon’s playing card and put it into the machine, too. A minute later, the machine beeped and both cards came sliding out. “Here you go, Brandon,” mom said. “Your debit card is ready to use!”
Having conversations about checking accounts, debit cards, and budgeting now will help your child understand the process when the time comes for their first checking account.