Thursday, October 21, 2021

Greenlight Review - Is This Debit Card Right for Your Kids?

 

Financial literacy can be one of the most important skills you work with your kids to develop. Understanding money could help them get ahead in life, as well as reach their goals.

One of the tools available to help your children learn more about money is the Greenlight debit card. Let’s look at the Greenlight card for kids and see whether it might work for your family. 

What is Greenlight?

Greenlight is a fintech company launched in 2014 by co-founders Tim Sheehan and Johnson Cook. The company is based in Atlanta, Georgia and has more than 3 million users.

Greenlight claims to help families raise financially smart kids by offering a debit card that parents can use to pay allowances and monitor spending. Greenlight offers investing opportunities as well. With the Greenlight card, kids have the chance to learn about spending and saving, and the other services offered by Greenlight can help kids learn the basics of investing

How does Greenlight work?

The Greenlight debit card for kids is just what it sounds like — a debit card designed for children to use. As a parent, you can load the debit card using the Greenlight app, and your kids then have access to funds. You have the option to make transfers manually or set up weekly automatic transfers. Parents also set the terms for adding money, which could include requiring chores, getting good grades, or just providing an allowance. You may also choose to add money to the card for emergency purposes.

Parents and kids both get access to the Greenlight app, but they see different information when they log in. As a parent, you can see what’s going on with your child’s account, including monitoring balances and seeing purchases. If investing is included, you can approve each trade. When your kids log in, they can see their balances and set goals, as well as learn valuable lessons. The idea is for them to be able to learn about financial management with a set of tools in the mobile app.

Greenlight card spending and saving balances are insured by the Federal Deposit Insurance Corp. (FDIC) up to the limit of $250,000. On the investing side, Greenlight is registered with the U.S. Securities and Exchange Commission (SEC) and is also a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). So although there’s no guarantee against decisions you and your kids make about money, you are protected in the event that the Greenlight company fails. 

 


Greenlight plans

Greenlight

This is the basic plan from Greenlight. It costs $4.99 per month and includes the Greenlight debit card, which you can get for up to five kids. You also get access to the Greenlight app, which offers two different experiences for parents and kids. This plan also includes tools that allow kids to see their spending and saving balances, as well as set their own goals. They can also track items like allowance and other ways of earning.

Parental controls are also included in the Greenlight plan. Parents can choose to add funds to the Greenlight card for their kids, as well as set spending limits, store-level controls, and monitor what’s going on in their kids’ accounts.

The Greenlight basic plan is the least expensive option and can work well for families with younger kids who are just learning about money management. It can be a useful tool to help them learn about how to manage money and set savings goals. If you’re interested in helping your kids develop basic financial literacy, this plan is likely to be adequate.

Greenlight + Invest

Besides all the tools available with the Greenlight plan, Greenlight Invest adds an element of investing. Kids can begin learning about investing money with as little as $1 on a platform designed for them. There are no trading fees involved and parents have to approve each trade from their parent account.

For those interested in helping their children learn about investing and the importance of getting started, this can be one way to do it. Greenlight helps kids buy fractional shares, providing them with a way to invest in their favorite companies. If your kids are old enough to learn about investing and start making those choices, this can be a good plan for your family, though it does come with a cost of $7.98 per month.

Greenlight Max

On top of having a Greenlight debit card for kids, as well as access to investing and other financial management learning resources, Greenlight Max comes with additional benefits. First, you get priority customer support for your issues. But other benefits include:

  • Identity theft protection: Identity monitoring and alerts that can help you stay on top of identity-related threats.
  • Cell phone protection: If a cell phone purchased with Greenlight is damaged or lost, it can be protected for up to five kids.
  • Purchase protection: Items that are damaged or stolen, and paid for with Greenlight, can be replaced or repaired.

For $9.98 per month, this plan could be good for families that want all-inclusive protection on top of access to financial resources and tools.

What we like about Greenlight

  • Security features: The fact that Greenlight requires parental approval for investments, as well as the ongoing monitoring and other security features can provide peace of mind. Your child can learn and make mistakes, but you help guide their decisions.
  • Educational tools: Teaching kids about how to set financial goals and monitor their money could be easier with the tools offered by Greenlight. The investing tools are also helpful when it comes to making it easy for kids to learn about investing and its benefits.
  • Teaches kids financial responsibility: Because it’s an app with financial management tools, kids can learn valuable lessons. The Greenlight debit card for kids prevents them from spending more than they have and could help them learn how to manage their money in a responsible way.
  • Easy money management for the family: With the Greenlight card, it’s easy for the whole family to manage their money and learn together. Parents can quickly and easily send money to the card, automate weekly transfers to their child's card, and monitor spending in real-time. Then it offers the chance to talk about finances and review decisions so kids have a better learning experience.

What Greenlight could improve

  • Monthly fee: There’s a monthly fee for using Greenlight. Depending on where you live and the bank you use, you might be able to get a joint account with your children and get a different kids' debit card for free, which allows you to add money quickly and easily without a monthly fee. There are also investing apps that don’t charge monthly fees while allowing custodial accounts for kids.
  • Parent-paid interest: Instead of paying a yield, the Greenlight card requires parent-paid interest if you want your kids to earn a yield. Other banks pay a set interest rate, even if it’s a small amount. Instead, with the Greenlight card, you have to pay the interest for your children, which can be a hassle.

FAQs about Greenlight

What safety and security features does Greenlight offer?

Greenlight offers a number of security features, including the ability to turn off the card in the app. It’s also possible to add fingerprint or face recognition. Parents can monitor the account and set limits. Greenlight also has FDIC insurance and SIPC insurance to protect your money in the event that the company fails.

 


Is there a minimum age to get a Greenlight debit card?

There is no minimum age to get a Greenlight debit card for kids. Your child must be at least 18 to get their own credit card account. However, it’s possible for your child to get a credit card at a younger age by becoming an authorized user on your credit card.

Is the Greenlight debit card accepted everywhere?

Greenlight is accepted where Mastercard is accepted because that’s the payment network it uses. Additionally, the Greenlight card is accepted internationally, with no foreign transaction fees.

Does the Greenlight debit card work with Apple Pay and Google Pay?

Yes, the Greenlight card works with both Apple Pay and Google Pay, as long as your child meets the age requirements with each of those platforms.

What's better, Greenlight or FamZoo?

Both Greenlight and FamZoo could help your kids learn about financial management and teach valuable lessons while keeping parents in control. Carefully consider your individual situation and needs to determine what’s best for your family.

How to get started with Greenlight

To start with Greenlight, you will need the following information. Gathering what you need ahead of time might help the process go smoother:

  • Email address
  • Mobile number
  • Identifying information, including your name, birth date, and Social Security number
  • Mailing address
  • Children’s names
  • Valid debit card or bank account

Once you have that information, you can click on the “Get Started” button on the Greenlight website. You’ll be prompted to enter your mobile phone number. Once you enter it, you’ll be taken to a page that will ask you whether you’re the parent/guardian or the child. When you confirm that you’re a parent, you’ll be texted a confirmation code. Enter the code and you’ll be able to create an account with Greenlight.

From there, you’ll be able to choose your plan and then download the app and provide information about the children you want to add to the app. Greenlight offers a 30-day trial and you can change your plan at any time.

The bottom line

For parents hoping to help their kids learn about money management, the Greenlight card can be a valuable tool. There are a number of resources, and it makes it easy for you to see what your children are doing with their money at any point.

However, Greenlight does cost money. There are other ways to provide your child with access to a regular or prepaid debit card, as well as learn about investing, without paying fees. Many of the best banks offer joint accounts with children, and these allow you access and control — though seeing everything probably isn’t as simple as what you’d get with Greenlight. You have to decide what works best with your own preferences for how to manage your money.

If you want everything in one place and in a way that’s easy to see and manage, Greenlight might be worth the cost.