There will be obvious signs your teen wasn’t ready for a checking account.
- The $35 overdraft fee.
- The bounced check.
- The $10 monthly service fee for dipping below the minimum balance.
Jumping from just using cash to using a checking account is like jumping from a tricycle to a 33 gear road bike.
So how do you know when your teen is ready for checking? What’s a good interim proving ground?
A low cost reloadable prepaid card. Choose one with no fees on declined transactions and no other hidden fees.
Then challenge your teen to pass the No Decline Challenge: go for six or more months making regular purchases without a single transaction being declined for insufficient funds. A sterling record will prove your teen knows how to monitor and manage an account balance effectively.
To make it challenging, your teen should have at least one recurring subscription that hits the card at regular intervals. (It could also be an internal family billing for a share of the family’s cell phone plan.) Why? Avoiding a decline for a scheduled billing requires some planning ahead to make sure enough funds are in place each time the charge hits.
And if your teen gets tripped up by a decline? Just reset the clock.
What if you decide to stick with the prepaid card beyond the six months? Just turn the No Decline Challenge into a regular No Decline Bonus. Move a few bucks on the card every time 30 days elapses with no declines.
Whether it’s onward to checking or onward to bonuses, the No Decline Challenge will turn your teen into a balance managing baller.
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