Parents today are navigating a financial world that looks nothing like the one they grew up with. And for many families, one question keeps coming up: When is the right time to give your teen a debit card?
With digital payments now the norm for young people, new research suggests that teens may actually learn better habits with a card in hand. But it also highlights some surprising tendencies around cash, spending, and savings that families may want to consider.
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Gen Z Says Cash Encourages Overspending
There is a clear generational shift in attitudes toward physical money, according to Cash App's Gen-Z Financial Future survey. More than half of Gen Z respondents said they're more likely to spend impulsively when they have cash, and nearly a third see cash users as "out of touch" or even "cringe." At the same time, 53% reported using cash only as a last resort.
These attitudes may be shaping how young people manage their money. Many Gen Z consumers are already using checking or savings accounts, but the survey found that savings levels remain low: about 46% reported having less than $500 saved. Limited awareness of interest rates may also be contributing — only 44% knew the rate on their savings account.
Why More Teens Are Using Debit Cards
Debit cards are becoming a common tool for teens to build financial skills. Most major banks allow teens as young as 13 to open checking accounts with a parent or guardian as a co-signer, according to Bankrate. Parents often see debit cards as a controlled way to help their children practice budgeting while still maintaining oversight.
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The Cash App survey reinforces that idea. Parents of teens ages 13–17 reported that giving their teens access to a debit card or savings account has:
- Increased their financial independence
- Encouraged more responsible spending
- Helped them build budgeting confidence
This suggests that early hands-on experience may help teens develop better long-term habits, especially when combined with parental guidance.
Teens Want Tools That Reward Good Habits
Another major finding from the survey is that earning interest is a powerful motivator. Over three-quarters of Gen Z respondents said they'd save more if they were earning interest. In response, Cash App recently expanded its 3.5% APY savings feature to Sponsored Accounts for teens ages 13–17.
The survey also shows that teens aren't just saving for short-term purchases. About 46% are building funds for emergencies, 36% are preparing for major milestones like college or moving out, and 37% are saving for experiences like travel.
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Signs Your Teen May Be Ready
While readiness varies by child, financial experts at Bankrate say parents should consider a few common indicators before setting up a debit card for their children:
- They're earning money. A first job or side gig is often a natural time to start managing income.
- They're driving. A debit card can help teens cover gas or handle emergencies.
- They frequently ask for money. A debit card tied to an allowance or stipend can help them practice budgeting.
Bankrate also says that parental involvement — such as setting rules, reviewing transactions, and holding regular "money check-ins" — plays a big role in whether teens use debit cards responsibly.
The Bottom Line
Debit cards are increasingly becoming part of the financial learning curve for teens. The data suggests that Gen Z sees digital money as the norm, while cash may actually encourage more spontaneous spending.
With the right guardrails and ongoing conversations, a debit card can be a practical way to help teens build confidence, understand budgeting, and establish healthy money habits before adulthood.
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