Step vs. Axos First Checking [Which Teen Debit Card’s Best?]

Setting your child up for future financial success isn’t just about creating a college fund or custodial account (though those are great to do!). You need to teach them how to manage money, as well. And the sooner they learn how to handle money, the better. Getting your child a financial card, such as Step’s secured credit card or Axos First Checking’s debit card is a great place to start. But which card is better? Today, I’m going to compare Step and Axos First Checking to help you decide which account and accompanying card makes more sense for your child. For each account, I’ll include an overview, any costs, and noteworthy features. For anyone still not ready to pull the trigger on either one, I’ll also highlight a few other competitive kids’ cards on the market.

Step vs. Axos First Checking Comparison

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Step Overview

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• Available: Sign up here

The free Step Visa Card is a unique “hybrid” secured credit card that’s tailor-made for kids and teens. It has the safety of a debit card, but it functions like a Visa credit card—including the ability to build your child’s credit history. Parents, who sponsor the card for their child, add money to this FDIC-insured account and can determine how their child can spend. A regular Step account allows a child to have both a physical spending card as well as a virtual card in the Step app, while a Parent Managed Account only allows the child to spend via a physical card. Either way, they can use their card anywhere Visa is accepted. Children can also use their cards to withdraw money from more than 30,000 ATMs for free. And parents needn’t fear that their child will overdraft—they can’t spend any money they don’t have. Further, the Step Card comes protected by Visa’s Fraud Protection and Zero Liability guarantee. That means if your teen’s card gets lost or stolen, or misplaced and fraudulent charges crop up, you can dispute the charges within a certain time frame to avoid liability for paying. Step also has fantastic savings benefits. Kids earn a high annual percentage yield (APY) on their money and can boost savings even more with Savings Roundup. Step even features an “invest” function that allows children age 13 and older to buy and sell Bitcoin for a small transaction fee. The app is not a pure crypto wallet, however—your kids currently can’t spend Bitcoin directly at vendors. Step has no age requirement, but anyone under 18 will need a parent, guardian, or trusted adult to sign them up. Related: 7 Best Trading Accounts for Minors [Stock Investing Under 18]

Step Plans + Costs

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Step is as free as free debit cards for teens get. There are no monthly fees, no subscription fees, and no account minimum fees. Members can use more than 30,000 fee-free ATMs. Step doesn’t even charge commissions on stock trades. Step primarily makes money through “interchange” fees paid by the merchant bank, rather than charging customers. So it’s very easy to use Step and never pay a dime. Now, Step isn’t perfectly free—no card is. There are a few situations where you could incur small fees, though most of these are par for the course for (or less than) comparable products. For instance, merchants charge $3.95 per cash deposit—Step covers that charge for your first two deposits, but after that, you’re on your own. Same goes for card replacements—Step offers up to two free card replacements for lost physical cards. After that, there is a $5 charge for each additional card replacement. (Fortunately, you can always use Step’s virtual card for free.) Step also charges a small fee when withdrawing funds out of a linked debit card. It costs 35¢ for transfers less than $20 or 1.75% of the transfer amount for transfers of more than $20. And when buying cryptocurrencies, buy and sell prices include a 2% markup that helps cover Step’s costs. Step also warns about a couple of other third-party fees:

• If your child chooses to use an out-of-network ATM, Step won’t charge any fees, but the ATM operator may charge a service fee.
• Step doesn’t charge commission fees for stocks, but the government does charge a pair of small fees—a FINRA transaction activity fee (TAF) and a Security and Exchange Commission (SEC) fees—that account for a marginal percentage of your sale. Each fee is calculated as total transaction amount * $22.90 / 1,000,000, rounded up to the nearest cent, so a $1,000 trade would come out to just 4¢ in total fees.

Just keep in mind that both of the above fees are typical of just about any financial institution that offers those services. Again: Step is as free as it gets. Related: How to Make Money as a Kid [25 Ways For Any Age]

Step Features

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Step Card

The Step Card is a Visa-branded card that can be used anywhere Visa is accepted, which is … well, at 44 million merchants in 200-plus countries and territories, that’s just about anywhere credit cards are accepted. It can also be used to withdraw money for free from 30,000-plus ATMs. (Note: Withdrawals are capped at $250 within a 24-hour period and $1,000 within a 30-day period.) Remember: The Step Card is technically a secured credit card. But in practice, the Step Card acts just like a prepaid debit card. Parents fund a kid’s account, and the kid can spend up to however much is in the account—but not a penny more. Parents have several options for how to fund a Step Card, including directly through a linked bank account, a debit card, direct deposit from an employer, or payment apps like PayPal, Venmo, and Cash App. You can even deposit cash from 70,000-plus retail locations. Lastly, the card is protected by Visa’s Fraud Protection and Zero Liability guarantee. You can dispute fraudulent charges within a certain time frame to avoid having to pay for those charges.

Credit Building

I said it in my Step review, and I’ll say it here: Step’s credit-building feature is by far and away the platform’s biggest draw. Virtually all secured credit cards let you build credit. But Step stands out because it works differently, it has a laundry list of features most other cards don’t have, and it’s the only such card available for users under age 18. That last point is what has made Step so popular among teens. When a parent sponsors a card for their teen, they can opt to have Step report the past two years’ worth of information—transactions, payment history, and more—to the credit bureaus when their child turns 18. Credit scores are assigned once someone turns 18, and most teens will begin with a score of under 600. But based on a Step survey, 18-year-olds who used Step for at least seven months had an average credit score of 725. That’s a massive difference that can mean easier access to (and lower financing rates on) everything from car insurance to apartment security deposits to student loans. Also helpful? The card’s Smart Pay feature automatically pays off purchases every month from funds in the deposit account. That keeps kids from ever missing a payment.

Savings Goals

Lots of kids’ debit cards give different names to their de facto savings accounts: With Step, it’s called a Savings Goal. Kids can have multiple Savings Goals where they can save toward individual goals such as buying a bike or a laptop. Users earn a competitive 5% annually—compounded and paid monthly—on up to $250,000 saved in their Savings Goals. Like with your average savings account, Step’s savings yield can change depending on movements in the Federal Funds Rate, but if that happens, Step will give you 30 days’ notice before it happens. To qualify, the user must have a direct deposit of at least $500 per month, and the benefit extends for as long as the direct deposits continue. So even if your teen just holds down a summer job for three months and meets the qualifying direct deposit, they can still enjoy three months of high interest. (Other perks of making a qualifying direct deposit? Bonus points on dining, food delivery, charitable donations, specific merchants—and you can get paid up to two days early.)

Savings Roundup

Step also has a round-up feature: Savings Roundup. With this feature, small purchases are rounded up to the nearest dollar figure, and that extra money is put toward a Savings Goal. Let’s say your child buys some candy for $2.75. Step will round that purchase up to $3.00 and put 25¢ toward a predetermined Savings Goal.

Investing

Step gives kids the opportunity to invest in more than 1,000 stocks and exchange-traded funds (ETFs), as well as cryptocurrency. Within Step, a child needs a stock account to invest in stocks and ETFs, then a separate crypto account to invest in cryptocurrency. Parents must open and approve these accounts for their child. Also, kids can only invest in stocks or funds their parents have recommended for them. Kids can invest with as little as $1 through Step thanks to fractional shares. Also, stock and ETF trading is commission-free, but Step does charge a 2% markup on crypto prices to help cover its costs. Step’s selection of more than 1,000 stocks and ETFs is technically much smaller than the thousands of stocks and funds they could access through a traditional broker, but it’s more than enough for beginner investors—and in fact, even intermediate investors could easily build a portfolio out of Step’s holdings. The crypto offering is extremely limited, though, with only Bitcoin offered at present. Related: Best Investing Apps for Teens Under 18 [Stock Apps]

Instant Transfers

Parents and other Step members can immediately send money to (and receive money from) one another with just a few taps. And while people rarely scoff at free money, you can include a note so the recipient isn’t scratching their head as to why you sent it.

Parental Controls

Most parents would prefer to dip their child’s toe into the money management pool rather than throw them in. Parental controls can help. Step allows you to monitor your child’s spending and freeze the card if you fear it’s lost or stolen (or fear your kid is being too irresponsible with it).

Allowance + Recurring Payments

Parents can easily set up allowance payments for their kids. You can set up recurring payments for regular chores, or one-time payments to reward your kid for spot chores, a good credit card, or otherwise doing something worth celebrating. Related: Best Allowance and Chore Apps for Kids

Smooth Transition to Financial Adulthood

Step isn’t just for kids—adults can use it as well! Once your child turns 18, they can keep the same credit card number and account. Step will handle getting them appointed as the legal owner of the account and make it an independent account. Everything stays the same from the cardholder’s end. They can continue to use the card and keep building their credit history. You can sign up for Step here. Related: 30 Best Side Hustles for Teens [In-Person + Online]

Axos First Checking Overview

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• Available: Sign up here

Axos First Checking is a free joint bank account for teens and adults offered by Axos Bank—an online-only bank with a focus on technology-driven finance. First Checking offers teens and their parents (or other adult owners of the account) a free debit card, peer-to-peer transfers, direct deposit, bill pay, extensive security features, even interest payments. The Axos First Checking account comes with a debit card—you can choose either Visa or Mastercard—that you can use to spend in store and online, as well as to withdraw cash. While Axos Bank doesn’t have its own ATM system, Axos offers fee-free access to 91,000 ATMs nationwide, and it reimburses up to $12 in third-party ATM fees every month. If you’re worried that your (or your teen’s) card is lost or stolen? You can lock and unlock the card from your Axos account. And the card limits cash withdrawals to $100 daily and debit transactions to $500 daily. Axos First Checking charges zero monthly maintenance fees, overdraft fees, and non-sufficient fund fees. It’s designed for teens between ages 13 and 17 (up to 18 years old in Alabama). And once your teen reaches adulthood, it’s easy to convert to another Axos checking account, giving the newly minted adult full control. Related: Best Debit Cards for Teens

Axos First Checking Plans + Costs

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If you hate fees, you’ll love Axos First Checking, which charges zero monthly fees and avoids a host of other fees. First, a look at the features: Axos charges no fees for overdrafts, non-sufficient funds, incoming wire transfers, first debit cards (and replacements), or money transfers. The account requires no minimum deposit, nor any minimum balance requirements. And not only do you get access to 91,000-plus fee-free ATMs, but Axos will reimburse you for up to $12 in domestic ATM fee charges every month—so you don’t really have to worry about third-party ATM fees, either. Axos Bank will charge $5 for customers who prefer paper account statements, and they do have a 1% foreign currency conversion fee. Axos Bank doesn’t charge a fee for cash deposits, but retailers may charge up to $4.95. Related: Best Prepaid Debit Cards for Kids and Teens [Reloadable]

Axos First Checking Features

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Below are some of Axos First Checking’s most notable features. Some of these features are geared towards the teens, while others exist to keep parents sane.

Axos First Checking Debit Card

The Axos First Checking account comes with a free Visa- or Mastercard-branded debit card. (You can choose which one during the application.) The card can be used in stores and online wherever the chosen brand is accepted, including internationally. Perhaps the most noteworthy feature of Axos’s card is its ATM access. Axos Bank allows you to withdraw cash fee-free from 91,000-plus ATMs nationwide. And if you come across an ATM outside of Axos’ network, no problem—it will reimburse up to $12 in third-party operator fees every month. Point-of-sale transactions are limited to $500 per day, while ATM withdrawals are limited to $100 daily. Card actions such as activating, deactivating, reactivating, ordering a replacement, and sending a travel notification can all be done online. Security features include active fraud monitoring, two-step authentication, and 128-bit Secure Socket Layer (SSL) encryption.

Parental Controls

Parental controls in Axos First Checking are fairly rudimentary. Parents can monitor their teen’s spending through account alerts received as real-time push notifications, emails, or text messages. They can also track transfers made from the account and lock/unlock the debit card from the mobile app and dashboard.

Cash Deposits

If teens have a tip-based job or receive a lot of cash for celebrations and holidays, they might want to deposit that cash into their accounts. Fortunately, while Axos is an online-only bank, there are still ways to make cash deposits. Members can log in to the app and use the ATM locator to find ATMs that accept cash deposits. Alternatively, through Axos’ partnership with Green Dot Network®, they can deposit cash at many popular retailers, including:

• ACE Cash Express
• CVS
• Dollar General
• Kroger
• Rite Aid
• Safeway
• Walgreens
• Walmart
• 7-Eleven

Members can instruct the cashier to add the provided cash directly to their debit cards. Usually, the amount has to be between $20 and $500, but some places allow up to $1,500. Axos Bank doesn’t charge a fee for the transaction, but retailers may charge up to $4.95.

Peer-to-Peer Transfers

Axos lets teens make peer-to-peer payments directly from their checking accounts online. Just an email or phone number is needed to send a secure payment. So whether they need to pay a friend back for cash, fast food, or a group activity, it’s quick and easy to settle up.

Earns Interest

Teens earn an interest rate of 0.10% on any money in their account—a nice bonus for doing nothing. While this is an admittedly small annual percentage yield (APY) compared to, say, a high-yield savings account or money market account, it’s still more than you’ll get on your typical checking account (which is nothing).

Direct Deposit + Mobile Deposit

Teens with jobs can easily get their paychecks directly deposited into their accounts. Axos Bank has no minimum direct deposit amount to avoid fees (which isn’t the case with every financial institution). Do the teen’s grandparents love to write birthday checks? Not an issue. Axos allows free mobile deposits. You can use a mobile device or computer to send money from a check straight into a First Checking account any time of day.

Bill Pay

While parents should always be covering a kid’s essential expenses, it isn’t unheard of for teens to be responsible for some of their nonessential costs. For example, a teen with a job might be asked to pay for their cell phone plan. With Axos’ free bill pay feature, parents can schedule payments from a primary account to ensure the teen doesn’t miss a cell phone payment. (Note: Only parents, not teens, can access this feature.) Bill Pay is parent use only.

Easy Transition to Adulthood

Once a teenager reaches adulthood, the account can be converted into a different checking account, such as Essential Checking, Rewards Checking, or CashBack Checking. The parent or original adult on the account can then remove themselves as a joint account owner so the new adult is completely in control. You can sign up for Axos First Checking here and read more in our Axos First Checking review. Related: Best Teen Checking Accounts [Banks for Teens]

Step vs. Axos First Checking: Our Editors’ Choice Is …

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Step and Axos First Checking are both free accounts that help kids become financially responsible. However, when you start comparing the accounts feature for feature, Step clearly takes the lead. Step lets kids invest in stocks, ETFs, and even Bitcoin. It offers a substantially higher APY than Axos First Checking and those who enable the Round-Ups feature can save even faster. But what really puts Step ahead of Axos First Checking—and virtually all of its competitors for that matter— is that Step can help kids build a credit history. When your child eventually needs to take out loans, purchase insurance, and more, they’ll be grateful to already have credit established. Plus, Step has no minimum age, whereas you need to wait until your child is a teenager for them to open an Axos First Checking account. None of this is to say Axos First Checking isn’t a good account. It can still teach your kids about spending and saving. For teens who frequently want to reload their cards with cash, such as those with tip-based jobs, Axos could be an excellent fit. While Step offers the first two cash deposits for free, it costs $3.95 per reload after that. Meanwhile, Axos First Checking doesn’t charge anything for cash deposits (though retailers may charge a fee). Overall, Step is our winner here, as it’s packed with premium features while still being completely free. If you’re interested in trying it out, you can sign up for Step here and learn more in our Step Review. Related: 26 Best Online Jobs for Teens [Earn Money at Home, Age 13+]

Other Debit Cards for Kids to Consider

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If you’re still not convinced on Step or GoHenry, you might want to look at these other highly rated options:

App	Apple App Store Rating + Best For	Fees	Promotions
Greenlight	☆ 4.8 / 5 Customer rating and parental controls	Core: $5.99/mo. Max: $9.98/mo. Infinity: $14.98/mo. (Each plan supports up to 5 children.)	None
Copper Banking	☆ 4.9 / 5 Teen financial independence	Copper $4.95/mo., Copper + Invest: $7.95/mo.	30 days free
Acorns Early	☆ 4.6 / 5 Accessible customer service support	1 month free. Individual: $4.99/mo. Family (supports up to 4 children): $9.98/mo.	1 month free
Revolut <18	☆ 4.7 / 5 Parent-paid bonuses	No monthly fees	None
Axos First Checking	☆ 4.7 / 5 Teens ready to learn about money management	No monthly fees	None
*Apple App Store Rating as of Dec. 19, 2024.

Related:

• Best Credit Cards for Teens [Build Credit]
• 4 Best Ways to Save Money for Kids [Children’s Savings Plans]
• Should You Open a Child Bank Account with a Debit Card?

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Step Disclaimer

Disclaimer: Step is a trademark of Step Mobile, Inc.