Debit card etc for under-18s?


L

Lobster

We are encouraging our 14-year-old daughter to take more responsibility
for managing her finances (amongst other things!) and as part of this
we've upped her pocket maney significantly so that, for example, she
buys all her own clothes etc rather than us buying them for her. She
has a 'youth' bank account (Royal Bank of Scotland R15) into which we
now pay a monthly sum by standing order.

I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18. This
strikes me as a bit bizarre - I can totally understand it in respect of
credit cards, but not for a no-overdraft debit card. So it seems that
if she wants to go shopping, she has no option but to wander round town
with a wedge of cash in her purse (that or make multiple trips to the
cashpoint and only shop near to them!). This strikes me as very risky
both in terms of losing money and getting mugged.

Anyone had experience of this and know a way round it?

Thanks
David
 
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M

Mike Scott

Lobster said:
We are encouraging our 14-year-old daughter to take more responsibility ....
I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18. This
strikes me as a bit bizarre - I can totally understand it in respect of
credit cards, but not for a no-overdraft debit card. So it seems that ....
Anyone had experience of this and know a way round it?
My son (16) has a debit card (HSBC, IIRC). Maybe banks differ? Obviously
not legislation!
 
D

Doug Ramage

Mike Scott said:
My son (16) has a debit card (HSBC, IIRC). Maybe banks differ? Obviously
not legislation!

--
No such legislation that I know of. But the risk could be with the Bank, if
the minor wanted to cancel any contract for non essentials?
 
M

Marx Peterson

Lobster said:
We are encouraging our 14-year-old daughter to take more responsibility
for managing her finances (amongst other things!) and as part of this
we've upped her pocket maney significantly so that, for example, she
buys all her own clothes etc rather than us buying them for her. She
has a 'youth' bank account (Royal Bank of Scotland R15) into which we
now pay a monthly sum by standing order.

I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18. This
strikes me as a bit bizarre - I can totally understand it in respect of
credit cards, but not for a no-overdraft debit card. So it seems that
if she wants to go shopping, she has no option but to wander round town
with a wedge of cash in her purse (that or make multiple trips to the
cashpoint and only shop near to them!). This strikes me as very risky
both in terms of losing money and getting mugged.

Anyone had experience of this and know a way round it?
I was 20 and my bank refused to give me a Switch card. With Maestro
(fka Switch) cards its sometimes possible to use them without money in
your account. For this reason banks won't give Maestro to anyone they
see as a potential risk.

Your daughter is however eligible for a Solo card, anyone 11 or over
can get one (http://www.solocard.co.uk/faqs.asp#question1). They're not
as widely accepted as Maestro but they cannot be used unless funds are
in the account. Ask your bank for a Solo card instead, if they don't
try the other banks. Banks might offer you a Visa Electron card, these
are similiar to Solo.
 
R

Ronald Raygun

Lobster said:
We are encouraging our 14-year-old daughter to take more responsibility
for managing her finances ... She
has a 'youth' bank account (Royal Bank of Scotland R15) into which we
now pay a monthly sum by standing order.

I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18.
The bank person who told you this was almost certainly mistaken.

The Solo card sounds like what you're after. Unfortunately RBS don't
offer this, at least not to youngsters, but other banks do. I think
Bank of Scotland do. According to www.solocard.co.uk, Natwest offer
it from age 11 and HSBC from age 13.
 
M

Marx Peterson

Mike said:
responsibility that

My son (16) has a debit card (HSBC, IIRC). Maybe banks differ? Obviously
not legislation!
I saw a case on Judge Judy where a guy gave his 17 yr old
friend/daughter(?) an additional credit card on his account. She maxed
it out, admitted it but refused to pay. The guy tried to sue this girl
who was then 18 for the money but was told that because she was under
18 when he gave her the card she couldn't legally enter into a contract
so therefore didn't have to pay the money back. This was the US so I'm
not sure if this could happen in the UK.

But, if a bank gave a Maestro card to someone who was 16, I wonder what
would happen if the card was used at shops that don't use online
authorisation, to take them into thousands of pounds of overdraft.
Would the bank be in the same situation as the guy on Judge Judy?
 
D

David Milham

My daughter has a HSBC Solo card - works well and very widely accepted.
Every transaction is credit verified first so she can't overdraw

--
Kind Regards

David

ASC Kent - Finance for Business
Telephone: 01795 591220
 
U

usenet

Lobster said:
We are encouraging our 14-year-old daughter to take more responsibility
for managing her finances (amongst other things!) and as part of this
we've upped her pocket maney significantly so that, for example, she
buys all her own clothes etc rather than us buying them for her. She
has a 'youth' bank account (Royal Bank of Scotland R15) into which we
now pay a monthly sum by standing order.

I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18. This
strikes me as a bit bizarre - I can totally understand it in respect of
credit cards, but not for a no-overdraft debit card. So it seems that
if she wants to go shopping, she has no option but to wander round town
with a wedge of cash in her purse (that or make multiple trips to the
cashpoint and only shop near to them!). This strikes me as very risky
both in terms of losing money and getting mugged.
Set up an account in your name and get her a card for the account, I
think that *is* allowed for under 18s. If the account is only used by
her then there is no difficulty separating transactions. You could
even get her a credit card this way.
 
T

Tim

Set up an account in your name and get her a card for the
account, I think that *is* allowed for under 18s. If the account
is only used by her then there is no difficulty separating
transactions. You could even get her a credit card this way.
I thought that even additional cardholders on credit cards must be over 18??
 
M

Marcus Collie

Lobster said:
We are encouraging our 14-year-old daughter to take more responsibility
for managing her finances (amongst other things!) and as part of this
we've upped her pocket maney significantly so that, for example, she buys
all her own clothes etc rather than us buying them for her. She has a
'youth' bank account (Royal Bank of Scotland R15) into which we now pay a
monthly sum by standing order.

I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18. This
strikes me as a bit bizarre - I can totally understand it in respect of
credit cards, but not for a no-overdraft debit card. So it seems that if
she wants to go shopping, she has no option but to wander round town with
a wedge of cash in her purse (that or make multiple trips to the cashpoint
and only shop near to them!). This strikes me as very risky both in terms
of losing money and getting mugged.

Anyone had experience of this and know a way round it?

Thanks
David
Further to other poster's answers:

There is no legislation, AFAIK, but naturally no bank will issue a fully
fledged debit card to anyone under the age of 18 (because they tend to
double-up as cheque guarantee cards) due to the risk of the account being
forced into an overdrawn position, from which the bank have no right of
recovery.

Solo and Visa Electron ARE offered however.

Nearly every bank offer these options to minors.

MC
 
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T

Tumbleweed

Lobster said:
We are encouraging our 14-year-old daughter to take more responsibility
for managing her finances (amongst other things!) and as part of this
we've upped her pocket maney significantly so that, for example, she buys
all her own clothes etc rather than us buying them for her. She has a
'youth' bank account (Royal Bank of Scotland R15) into which we now pay a
monthly sum by standing order.

I had assumed that she'd be able to get a Switch card on this account to
enable her to buy stuff in shops up to the limit of her account balance,
but the bank tell me that legislation forbids this until she's 18. This
strikes me as a bit bizarre - I can totally understand it in respect of
credit cards, but not for a no-overdraft debit card. So it seems that if
she wants to go shopping, she has no option but to wander round town with
a wedge of cash in her purse (that or make multiple trips to the cashpoint
and only shop near to them!). This strikes me as very risky both in terms
of losing money and getting mugged.

Anyone had experience of this and know a way round it?

Thanks
David
both mine had debit cards from barclays when they were that sort of age IIRC
(hmmmm or was it when they got to 16, cant quite recall), they were
restricted in some way, for example couldnt be used over the net at most
places, but otherwise worked fine.
 
T

Tumbleweed

Tumbleweed said:
both mine had debit cards from barclays when they were that sort of age
IIRC (hmmmm or was it when they got to 16, cant quite recall), they were
restricted in some way, for example couldnt be used over the net at most
places, but otherwise worked fine.
Visa Electron, that was the jobby
 
J

john boyle

Lobster said:
This strikes me as a bit bizarre - I can totally understand it in
respect of credit cards, but not for a no-overdraft debit card.
What makes you think it is 'no-overdraft'?. Debit cards are not on line
all the time and overdrafts can arise.
So it seems that if she wants to go shopping, she has no option but
to wander round town with a wedge of cash in her purse (that or make
multiple trips to the cashpoint and only shop near to them!). This
strikes me as very risky both in terms of losing money and getting mugged.
If you want her to 'take more responsibility' then you have to let her
take the rough with the smooth, or perhaps you shouldnt let a youngster
carry so much cash then. Why not look after it for her yourself?

Has she got a mobile phone?
 
L

Landru

The Solo card sounds like what you're after. Unfortunately RBS don't
offer this, at least not to youngsters, but other banks do. I think
Bank of Scotland do.
Not anymore, Bank of Scotland/Halifax have migrated from Solo to Electron.

Landru.
 
R

Ronald Raygun

john said:
What makes you think it is 'no-overdraft'?. Debit cards are not on line
all the time and overdrafts can arise.
Because Solo cards (perhaps Electron too?) are specifically always
authorised on line and cannot create an overdraft. It's part of
their spec.

This does have the disadvantage that they are less universally
accepted than "normal" debit cards like Switch, because not all
retailers are geared up to handle all-the-way-to-the-customer's
account online authorisation.
 
L

Lobster

Set up an account in your name and get her a card for the account, I
think that *is* allowed for under 18s. If the account is only used by
her then there is no difficulty separating transactions. You could
even get her a credit card this way.
Thanks to all for all the replies. I'll get back to the bank first and
see if I can get any more joy with getting a Switch card as it sounds
like they may have fed me some wrong info.

About the above - one potential pitfall I can see there comes from
experience: my wife opened a joint account with her mother, who then had
early Alzheimer's and wasn't capable of running her own account any
more. Mother-in-law had a cashpoint card to enable her to obtain funds.
It certainly wasn't an ideal arrangement in many ways, but for many
reasons which I won't go into, was the only way forward, and has now
ended anyway.

The account was always run at a very low balance (<100 GBP) and topped
up regularly for safety's sake; one of the problems was that when
mum-in-law went to the cashpoint, she'd often withdraw money to the
limit of her availability. We specifically requested no overdraft
facility, but every few months the bank would kindly provide one - so
"Sum available for withdrawal: 300 GBP" would appear on the screen, and
MIL would happily draw funds out up to the new withdrawal limit. The
bank informed us, unbelievably, that there was no way to prevent the
facility being provided automatically every few months, each time the
account was reviewed - they advised us to look out for it and ask for it
to be revoked each time! (Ordinarily I would have raised merry hell
about this, but because MIL wasn't really fit to hold an account - hence
the problem - we just had to accept it.)

So I can see the potential of a similar situation arising with my daughter!

David
 
L

Lobster

Marcus said:
There is no legislation, AFAIK, but naturally no bank will issue a fully
fledged debit card to anyone under the age of 18 (because they tend to
double-up as cheque guarantee cards) due to the risk of the account being
forced into an overdrawn position, from which the bank have no right of
recovery.
But if the bank doesn't issue a cheque book...? (and they haven't - and
my daughter has had this account for 2-3 years already).
Solo and Visa Electron ARE offered however.

Nearly every bank offer these options to minors.
What's the fundamental difference between these ands Switch which makes
them OK for youngsters, whereas Switch apparently isn't?

David
 
R

Ronald Raygun

Lobster said:
What's the fundamental difference between these ands Switch which makes
them OK for youngsters, whereas Switch apparently isn't?
I think you've already been told this in one of the other posts,
perhaps you missed it.

The problem is that Switch isn't always authorised directly to the
account, so it would be possible to run up an overdraft.

Minors are in law incapable of entering into contracts, and so a
bank would be unable to sue the minor to recover the debt, since
it can only have been created as a consequence of an agreement,
but the minor can't enter into a legally enforcible agreement.

The banks don't want to take the risk that they would lose out
as a result. It'd be the similar if giving them a cheque book.
A minor's signature isn't worth the paper it's written on.
 
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J

john boyle

Ronald said:
Because Solo cards (perhaps Electron too?) are specifically always
authorised on line and cannot create an overdraft. It's part of
their spec.
Er, thanks fore the revision. The OP only referred to a 'switch' card.
 
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