The financial services credit unions offer children and the lessons they teach become more sophisticated as children get older.
“It’s a progression of financial education,” says Jennifer Tai, marketing specialist for NuVision Federal Credit Union in Huntington Beach, Calif. While the credit union works with 13 area schools to deliver its financial literacy program, Tai says it also builds education into the products themselves.
The $1.2 billion asset credit union has three levels of youth accounts. Children are eligible for checking accounts and debit cards when they reach age 13. With $106 ATM limits—enough for $100 plus any fees—the NuVision youth debit cards allow young teens enough opportunity to make some relatively significant financial decisions, Tai says, but not more than they can handle.
Parents are linked to the accounts, and they—not their children—are ultimately responsible for any missteps.
The goal is to give children the chance to make some real decisions and maybe even some mistakes while the stakes are low, the supervision is high, and the learning opportunities and consequences are immediate, Tai explains.
That way, when these children go off to college and are out of their parents’ purview, they’ll know how to use debit cards and credit cards responsibly. That’s certainly good for them, and for credit unions, if it prevents a delinquency down the road.
“Financial education results in better members and customers for everyone,” Tai says. “Regardless of who teaches the financial lesson, we all benefit.”
But Tai also believes the credit union should do the teaching. “We’re building that relationship,” she says. “We trust them and they trust us. We’re holding their money. We all know that banking is a habit, and no one wants to change financial institutions. If your current institution has what you need, you’re going to stay.”
Tai concedes that some credit union leaders might balk at seventh-graders carrying plastic, but she believes some are ready. The program is heading into its fifth year, and Tai wonders if NuVision Federal needs to start even younger.
“We thought we were being progressive when we started giving debit cards to 13-year-olds,” Tai says but that’s changing. A local bank is offering debit cards to children when they turn 12, she notes.
Not only do youth programs create more financially literate consumers, they also turn parents into better credit union members, Tai says. “Families that have youth accounts with the credit union tend to do more business with us. “We see, on average, an extra service per household. These members are coming into the branch more often.”
The children, probably drawn by contests and prizes, are bringing their parents into the branches where they have a chance to ask questions about products and become familiar new services.
“When parents know there’s a financial institution that has something for everyone in the family,” Tai says, “that’s where they’re going to go.”