The latest trend for parents to lookout for is large financial institutions pushing debit cards on kids between ages 8-18. Numerous companies such as Apple, Fidelity, Verizon, FamZoo, Greenlight, Goalsetter, Till, Gohenry, Steo, Wingocard, and Cooper are raising billions of dollars in capital all in an effort to put debit cards in your kids' hands.
This is an interesting issue for debate as learning financial literacy is absolutely necessary, but is that really what these companies are doing? Not only do they reap large profits off of transaction fees but critics argue that they are introducing kids as young as 8 years old into the world of consumer consumption. So called “training-wheel products” haven't historically been a priority for banks, which generally rely on adult clients to take their children in and set accounts. From there, they start squeezing people with overdraft fees. But, start-up companies see great opportunity in attracting tens of millions of new customers to the table that are much more likely to incur overdraft fees and become easy marks for getting their pockets picked. The other more sinister reason for the new marketplace is the value of the consumer data that these companies will use, sell, and exploit. The right to a person's data is a blog for another day, but in the meantime please watch your kids when it comes to this new kid consumer financial market or they'll be looking to file their first bankruptcy before they graduate from high school.