Are You Thinking About Getting Your Child a Debit Card?
Getting a debit card may be a bigger milestone in your child’s life than it was for you in your younger years. The Truth In Lending Act (TILA) and the Electronic Funds Transfer Act (EFTA) protects consumers who are involved in using electronic banking methods such as debit and credit cards.
Getting a debit card and checking account is a great way to teach your child financial responsibility as they get older, start to spend more, and get their first job. First you should contact your bank and see if your child is old enough to have their own checking account. If not, then you should be able to set up a joint account. Be sure to also look for checking account options that are free.
A debit card is also a good opportunity to teach your child about how to use electronic and online banking methods. The EFTA protects consumers involved in using electronic methods to manage their bank accounts. This includes debit cards, ATMs, direct deposit, pay-by-phone systems, electronic checks, and online transactions. The EFTA also protects consumers against illegal, fake charges. It is important your child learns how to monitor their bank accounts for illegal charges and knows how to report them. If a fake charge on a debit card is not reported to the bank within two business days, under the EFTA the account holder could be liable for up to $500 of the charge.
The TILA, under the Consumer Credit Protection Act, protects consumers involved in contracts with borrowed funds with creditors and lenders. Therefore, you and your child should be informed about overdraft choices and regulations, fees, interest rates, billing periods, and balance requirements when opening an account for a credit card. It is also important to learn how to dispute a fraudulent charge on a credit card. Under the TILA, cardholders may be liable up to $50 dollars of unauthorized charges. You can read more about the TILA in the book 23 Legal Defense to Foreclosure: How to Beat the Bank by Troy Doucet.
The attorneys at Doucet & Associates Co., L.P.A. help enforce consumer rights listed in the TILA and EFTA. If you are not informed about specific account requirements before signing a contract or denied the right to have an illegal charge removed from your account, your TILA and EFTA rights may be violated. Contact Doucet & Associates Co., L.P.A. for a consultation at (614)944-5219 or send us a message online by clicking here.