Step vs. Greenlight vs. Current – Which Banking Solution Works Best for Teens?
Teenagers have minimal funds and few expenses. So, you may be wondering why they should have a credit card. However, there are numerous benefits of getting a credit card for your child, regardless of age. Owning one teaches kids about financial responsibility, which is a crucial skill for life. A smart choice of a credit card will ensure your child learns and implements prudent spending habits. And given that many grown-up Americans struggle with managing their credit cards and consumer debt, it is wise not to wait until adulthood to introduce your kids to the important financial concepts and foster financial literacy. To help their kids grow into more financially responsible adults, many parents look for pre-paid credit cards for their teenagers. This article will explore which banking solution works best for teens out of the three most popular options – Step, Greenlight, or Current.
Why do teens need credit cards?
Besides teaching them financial responsibility, prudent spending habits, and the importance of savings, credit cards help build trust between them and their parents. In addition, they allow kids more independence. Let’s take a very plastic example. Kids grow quickly, and soon they will outgrow their childish bedrooms. So, letting them decorate their space and get a room that matches their age is an excellent opportunity to teach teens how to manage their budget. Parents will allocate a specific amount of funds for this purpose so their teens can plan the design and go shopping themselves.
Step – Banking Solution for Teens Overview
The Step banking solution offers an FDIC-insured bank account a Visa card, and there are no annual fees or ATM withdrawals fees. The card has features of a credit card and a debit card, and when parents send the money, it will be received instantly. Also, teens can use Step Credit Card anywhere where Visa cards are accepted, and they can use it for online shopping.
In addition, this card is an excellent choice because it allows users to establish their credit and enhance their credit score. This feature is so appealing to parents because it lets them teach their children about intelligent spending habits, money management, savings, and overall financial literacy. Moreover, it will be a fantastic springboard for future financial responsibilities, the first of which will likely be student loans. Later, a well-established credit history will assist them when the time to purchase their first real estate comes. Also, a solid credit score plays a significant role when renting an apartment.
Furthermore, setting up the account is pretty simple. Firstly, a parent will need to provide their cell phone number and download the mobile app. Then, they will provide their Social Security Number and register the account. After that, you only have to wait 5-7 days for the card to arrive.
As for security, your child’s identity will be well-protected, and they will be safe from fraud due to Visa’s Zero Liability Protection. Also, parents get instant notifications whenever a purchase has been made. However, where Step falls short is the option to prevent particular spending categories or the ability to pre-approve specific retailers.
Greenlight – The Overview and Benefits
Set up and registration are very simple, as with Step. Parents will download the mobile app, connect it to their bank account, wait for the FDIC-insured card to arrive, activate it, and transfer the cash to it.
Unlike Step, Greenlight comes with fees. And there are three packages:
- Basic Greenlight option – $4.99 per month for up to five users, allowing teens to earn, save, and spend
- Greenlight + Invest option – $7.98 per month for up to five kids, also allowing making investments
- Greenlight Max option – $9.98 per month for up to five kids, allowing for investing, 1% cashback deposited onto kids’ savings accounts, payment protection, priority customer support, and more
Furthermore, this banking solution for teens allows for a chore management system that lets parents set chores for their kids to complete. Upon completion, the money is released to their account.
Also, you can think of Greenlight more like a debit card, so a more common comparison may be Greenlight vs GoHenry.
As for parental control, Greenlight more than delivers. It is highly flexible as parents can set spending limits, limit specific stores, both in-person and online. Moreover, there is an option for parents to pay interest on their kids’ savings account to encourage saving and teach kids about interest. In addition, kids can move money to their savings account, but parents will have to approve the transaction if they want to move it out of it.
Finally, security is also at a high level with FDIC insurance and Mastercard’s Zero Liability Protection, as well as fingerprint and facial recognition.
Current – Review of Credit Card for Teens
Like the other two solutions, the setup for Current is pretty simple. The parent will receive a download link from the company and connect the app with their bank account. Then, the parent will have to provide their Social Security Number and an identification document (a driver’s license or passport). When the card arrives, parents can activate it and load it with money. The card functions as a debit card as teens cannot spend more than what they have on it, and there are no overdraft fees. But there is an annual fee of $36 per teen.
Current allows for a lot of flexibility in terms of monitoring kids’ spending habits, setting spending limits, and restricting specific stores or purchasing categories. Also, the parents will receive instant notifications once that card has been used. Another interesting feature is that parents can set automated weekly or monthly allowance payments. And there is an option of instant money transfers.
If a teen has a job, this card offers them a possibility to deposit their paychecks into their accounts directly. Moreover, there is a mobile check deposit option, which is fantastic as it lets teens photograph their paycheck and deposit the money directly onto their account.
As for security, this card is also very safe, and besides FDIC insurance, it also comes with an EMV. Additionally, the mobile app also has face identification and fingerprint lock.
Step vs. Greenlight vs. Current – The Overview
Here is an overview of all the features that Step, Greenlight, and Current offer.
|Costs/Fees||/||From $4.99 per month for up to five teens||Annual, $36 per teen|
|Automated allowance option||Yes||Yes||Yes|
|ATM withdrawal limit||$250||$500 per day||$500 per day|
|Simplicity of use||Very simple||Very simple||Simple and intuitive mobile app|
|Spending limits and account monitoring||Only account monitoring||Yes||Yes|
|Card Issuer||Visa Debit Card||Mastercard Debit Card||Visa Debit Card|
The Final Verdict – Step vs. Greenlight vs. Current
As you can see, the primary features of Step, Greenlight, and Current are pretty much the same. However, there are a few significant differences to note before deciding on the best option for you. So, it will depend on what you want to achieve. For example, if you’re going to help your child build a credit score, Step is the best option. Still, if you want to promote savings, then Greenlight or Current is for you. Ultimately, you have to evaluate carefully what you need and what your teen will benefit from the most.
This information was originally found at ChristianFinanceBlog.com.