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Jessica Turner

Current vs Step vs Greenlight: What’s The Best Credit Card For Teens?

Last updated on October 16th, 2021 at 12:07 am

In this article, we’ll look at the three best credit cards for teenagers and provide guidelines to help you find the best one for your teen. 

 

You might wonder if credit cards are even necessary for teenagers, who are likely to have limited financial resources, and hopefully even fewer expenses. Having a line of credit, regardless of your age, comes with a significant amount of responsibility, which is why traditional card issuers only extend credit to those 18 years or older. Getting a credit card earlier, however, could be a wise financial decision for your teen’s future – if done correctly. One key is to emphasize prudent spending and on-time payments.

 

Credit cards and consumer debt are excellent tools, but many Americans struggle to manage them responsibly. According to the Federal Reserve’s consumer credit report, the average outstanding revolving balance is around $960 due to a lack of financial literacy

 

You incur high-interest payments and damage your credit rating if you fail to pay down your entire debt every month. But, alas, far too few Americans understand even this basic concept. 

 

Instead of waiting until adulthood or forcing teens to take this perilous journey on their own, one solution is better education about debt and money management when they are still young. You may want to preserve childhood as long as possible and hesitate to introduce important financial concepts too early, but studies show that children as young as seven can understand the basics of personal finance. As a result, many forward-thinking parents are looking for prepaid credit cards for their teens to help them learn important lessons.

 

The best of these teen credit cards have low (essentially zero) credit requirements and fees. In this article, we’ll look at three of the newest credit cards for teens — Current vs Step vs Greenlight — to compare their benefits, fees, and technology in-depth to determine which is the best credit card for teens. 

 

But first: do teens really need credit cards?

 

Teens can be impulsive, and parents are rightfully concerned that they will amass massive, unmanageable debts. There are many horror stories and this is an all-too-real fear for many parents. It’s no surprise, then, that many parents remain apprehensive about handing their teen a credit card.

 

Luckily, teen-specific credit cards with a few important guardrails have emerged to address parents’ concerns, providing the ability to control and monitor their teen’s spending. Consider it a supervised credit card. You can see what and where your children spend their money, which creates opportunities for coachable moments.

 

Credit cards for teens can help:

 

  • Teach them about money management
  • Provide them with payment options in case of an emergency
  • Help them build a credit history, making adult tasks such as applying for a car loan or renting an apartment easier in the future
  • Provides a potential to earn valuable rewards, such as cashback

 

What are the requirements to apply for a credit card as a teenager? 

 

Although the minimum legal age to apply for a credit card is 18, minors under the age of 21 also have a more difficult time qualifying for their first credit card without a steady source of income. 

 

That said, younger teenagers and those who do not have a source of income can be added as authorized users to their parent or guardian’s credit card accounts. That’s how card issuers like Step, Current, and Greenlight enable younger folks to experience their services. 

 

Teens aged 18 and up are eligible to apply for a “traditional credit card” without the assistance of a parent or guardian, but they must provide proof of income.

 

Remember that the Credit CARD Act of 2009 makes it difficult for teenagers without a source of income, such as a part-time job, to obtain a credit card. Any allowance, even if given on a consistent basis, will be ignored.

 

Current vs Step vs Greenlight: Comparing the best credit cards for teens 

 

 

What’s the Best Teen Credit Card?: Current vs Step vs Greenlight

     
Cost / Fee $36 per teen per year No Fees Plans start at $4.99 per month for up to 5 teens
Card Issuer Visa Debit Card Visa Debit Card Mastercard Debit Card
Build Credit History?
Offer Saving Facility?
Automated Allowance Payments?
Merchant Blocking Feature?
Geographical Availability US Residents US Residents US Residents
Direct Deposit (from Paycheck)?
Fingerprint & Facial Recognition?
Customizable Card Aesthetic? Colors Picture
ATM Withdrawal Limits $500 daily $250 daily $500 daily
Website 

 

Review of Current’s credit card for teens

 

Source: Current 

 

Current’s setup is quite simple. The company sends a download link to a parent who enters their phone number. After downloading the app, it can be linked to a bank account. Current will also require the parent’s SSN as well as identification documents such as a driver’s license or passport.

 

Parents link the account with their teen, and Current sends a debit card to the account holder’s address. The card can be activated once received and loaded with money by the parents.

 

Current’s card works similarly to a debit card. There is no overdraft fee, and teens are not permitted to spend more than the amount on their card. There are also numerous features on the app that will appeal to parents wanting to monitor and control their teen’s spending. 

 

For example, parents can set spending limits, restrict specific merchants or categories, and receive spending notifications for any card activity. Other notable features include the ability to schedule monthly or weekly allowances and instant money transfers.

 

But it doesn’t stop there —  Current has even more important features for teens. Direct deposit allows them to have their paychecks deposited directly into their bank accounts up to two days before payroll. Another option is a mobile check deposit, which allows users to photograph a check and deposit it into their account. 

 

Source: Current 

 

In addition, the cards come with an EMV for protection, alongside FDIC insurance. The app has a face ID and fingerprint lock for added security.

 

Overall, Current is an innovative and feature-packed card. It’s safe and secure, and the parental monitoring and control features go a long way to mitigate risk.

 

PROS

    • Simple, intuitive mobile app
    • Instant banks transfers
    • An allowance schedule feature 
    • The card is accepted anywhere that accepts Visa
    • Spending limits and account monitoring 
    • Excellent security
    • The app comes with a face ID and fingerprint lock

 

CONS

    • Annual fee of $36 per teen
    • Account withdrawal limits of $500 per day

 

Review of Step’s credit card for teens

 

Source: Step

 

The Step card offers teens a free FDIC-insured bank account and a Visa card. The card is classed as a secured-spending card because it has the features of both a credit card and a debit card. 

 

There are two apparent distinctions between Step’s offering vs Current and Greenlight cards. To begin with, Step is entirely free. That’s right, there’s no annual fee whatsoever. Second, the card enables teenagers to establish credit and improve their credit scores. This is an appealing feature for parents who want to give their teenagers a crash course in financial literacy. This head start can assist with future student loans, car loans, and so on. I, for one, definitely wished I had a more robust credit history built up when I started looking for my first apartments in college, and Step can help kids build it much earlier.

 

Source: Step

 

The setup is relatively simple. The parent provides their cell phone number and downloads the app. From here, they provide an SSN to register, and the card arrives in 5-7 days.

 

Step includes features that are common to all teen debit cards. Money can be sent and received instantly, and it’s easy to add money to the account on the fly.

 

There are a few areas where Step falls short of its competitors, however. If a teen works for a company that pays by check or cash, Step may not be the best card. That’s because teens are currently unable to deposit cash into their Step accounts, and a mobile check facility is also unavailable. That said, we’re confident Step will add this feature in the near future.

 

Like Current, Step cards can be used anywhere that accepts Visa, including online.

 

And Step also has excellent security to protect your and your teen’s identity. The APIs (the software that communicates between Step and the parent’s bank) use high-quality Transport Layer Security (TLS) encryption. You’ll also be protected from fraud by Visa’s Zero Liability Protection.

 

For parents, Step has fewer safety features than other debit cards for teens. While parents are notified of each purchase, some of Step’s competitors take a more progressive approach by allowing specific spending categories to be guard-railed, alongside a more dynamic system for pre-approving particular retailers. If these features are critical, Step may not be the right card for you.

 

PROS

    • Helps with credit scores
    • Despite helping with credit scores, Step doesn’t charge interest rates
    • No fees
    • No overdraft facility
    • No ATM fees
    • Parent control monitoring through spending notifications
    • Referral program

 

CONS

    • ATM Withdrawal limits of $250
    • No cash deposits
    • No mobile check deposits

 

Review of Greenlight’s credit card for teens

 

Source: Greenlight

 

The setup of Greenlight’s debit card works very much like Current and Step’s. Parents download the app and connect it to their bank. From there, the card arrives, and parents activate and load it up with cash.

 

One novel feature is Greenlight’s Chore Management system. Parents can set chores with a corresponding monetary payouts released upon completion. This is an excellent way to increase motivation and get things done around the house!

 

The card costs $4.99 per month for up to 5 teens. There are extra options that allow for investment, payment protection, and priority customer support. Additionally, identity theft and mobile phone protection are also available, but increase the total cost to $9.98 per month.

 

Source: Greenlight

 

One feature that might prove interesting to younger users is customizable cards. Teens can have their face (or any photo) on the card at the cost of $9.99. 

 

Greenlight provides a ton of flexibility in terms of parental control. Parents can set overall spending limits, as well as set limits for specific online or in-person stores. The app also allows parents to specify how much “fun money” can be spent each month. This represents a level of flexibility that parents can use to build and maintain trust with their teens that simply didn’t exist when I was growing up.

 

Parents can designate which stores the card is valid in or turn the card off within the app along with the various spending limits options.

 

Because encouraging teens to save is an important part of Greenlight’s mission, they’ve included a feature for parent-paid interest on savings. Parents can set and pay interest on savings accounts, teaching their children about the power of compound interest. Greenlight’s debit card enables teens to deposit money directly into their savings account. Moving money out of a savings account, on the other hand, necessitates parental approval.

 

When compared to other cards, the direct deposit facility is somewhat limited. While teens can be paid directly by their employers, other forms of payment such as PayPal, Venmo, or Apple Cash are not accepted.

 

Greenlight’s security is satisfactory. They are FDIC insured up to $250,000 and have Mastercard’s Zero Liability Protection. They also have fingerprint and facial recognition tech to make it harder for your account to get hacked.

 

Greenlight’s spending guardrails work well and should give parents peace of mind. While the Greenlight card can be used anywhere a Mastercard is accepted, certain activities are restricted. For instance, dating sites, security brokers, gambling, lotteries, and other similar services fall into this category. Furthermore, cash back is not available via Greenlight.

 

PROS

    • Dual funding categories: Parents can designate how much of the funds can be used without restrictions, while the rest of the balance is subject to parental control
    • Notifications of spending, balance, and also situations where the card was declined
    • Real-time fund requests let teens send a request for additional funds, which can be handy in an emergency.
    • Up to five children allowed per parent account 
    • Facility to help children learn to invest in a supervised way
    • Parent-paid interest can help children learn the benefits of compound interest

 

CONS

    • Limited direct deposit facility
    • The card is not accepted in many countries
    • Monthly fee of between $4.99 to $9.98

 

 

Customer Reviews: What are folks saying about Current, Step, and Greenlight?

 

Current’s Teenage Banking Reviews

 

Overall, Current has garnered quite a few positive reviews: 

 

 

 

 

Step for teens reviews

 

Customers of Step are also pleased with the card’s overall effectiveness.

 

 

 

 

Greenlight reviews

 

Greenlight has garnered praise particularly for the app’s chore management system.

 

 

 

 

The Verdict: Current vs Step vs Greenlight — Which credit card is best for teenagers?

 

While the core services of Current, Step, and Greenlight are similar, a few notable differences will appeal to different parents. In an increasingly cashless world, each card provides a secure way for teenagers to hold and spend money. Each app aims to promote financial literacy among the next generation, with slightly different approach.

 

So which credit card is ultimately best for your teenager? That depends. Let’s summarize. 

 

Source: Current 

 

Current has some excellent features geared towards financial independence. Allowances can be pre-scheduled, forcing teens to learn how to balance a regular budget. Alternatively, parents can transfer funds immediately. Furthermore, if the teen has a job, Current offers excellent deposit options such as mobile check deposits via smartphone photos. Teens can easily set savings goals and divert money accordingly. 

 

They also offer robust spending controls for parents. You can set spending limits and even block specific stores or categories using dynamic settings. Current’s many features geared directly towards teenagers make it a one-stop-shop for parents to teach teenagers about money. It’s clearly built for today’s fast-paced, technological world, making it ideal for the vast majority of parents. 

 

Source: Step

 

Step is ideal for teenagers who want to start building a credit history as early as possible. This card is one-of-a-kind in this regard — as both Greenlight and Current merely offer debit cards unlike Step’s true line of credit. If renting an apartment or buying a car is on your teen’s agenda for the near future, they will need a credit history. Solid credit history can land them better interest rates and more favorable terms. If that speaks to you, then you should definitely reap the benefits of Step.

 

However, for parents, Step lacks the customization options that would allow them to have more dynamic control over where their teens spend their time. While parents are notified about where their children are spending their money, many would prefer the ability to block specific merchants.

 

Of course, the biggest advantage of Step is that it is completely free. But the downside is the limited deposit options — no cash or cheque deposits can be made into the account.

 

Source: Greenlight

 

Greenlight is an excellent way for parents to get their children started on the path to financial responsibility. It is suitable for younger teens due to its excellent chore management system and customizable card. Greenlight is your best bet if you intend to teach your teenager about discipline, hard work, and the value of money. It offers the best spending controls among the three brands.

 

The spending limits and parental control features are more complex and flexible than those found on other teen debit cards. Parents can specify which stores and service categories are permitted to use the card.

 

It is the most expensive option on this list at $4.99 per month. However, each adult account can have up to five children.

 

Which one do you think is the best credit card choice for your teenager? Let us know in the comments below.

 

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