Step vs. BusyKid [Which Is the Better Kids’ Debit Card?]

As parents, we do our best to prepare our children for the future. We try to teach them the importance of education, the inevitability of heartbreak, how to drive, and more.

Don’t forget to add financial literacy to your list of what to teach your kids. Giving kids some hands-on practice when it comes to money management is invaluable and a debit card with built-in parental controls is a great place to start.

But which kids’ debit card is best? Since you’re here, you’ve likely condensed your list of possibilities down to Step and BusyKid. I can help you make that final choice.

Today, I’m going to pit Step against BusyKid. I’ll give an overview of each card, detail the costs, and go over the features that make these cards stand out. Worried you missed something in your original research? I’ll also give my thoughts on a few other kids’ debit cards worth consideration.

Step vs. BusyKid 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: 5 Best Under-18 Investment Accounts [Invest as a Minor]

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.

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]

BusyKid Overview

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• Available: Sign up here

If you’re looking for prepaid debit cards for kids that let your kids spend while learning about money, and lets you pay them allowance, consider the award-winning BusyKid app and the connected BusyKid Visa Spend Card.

BusyKid started as an easy-to-use, interactive chore app but has since added a prepaid debit card for kids that allows your children to spend their money both in person and online. Better still: Your children can earn money by completing chores and other tasks around the house, then use the app to learn valuable financial skills, such as budgeting, saving, and even giving back.

Parents can pay allowance on an ad hoc basis, or they can set up Auto-Allowance. When parents add to their children’s accounts, that money can be split among their Save/Invest, Share, and Spend allocations:

• Save/Invest: Parents can automatically allocate money toward a savings basket, and they can also match any money their children elect to save.
• Spend: When your kid is ready for a little independence, they can spend from this account using BusyKid’s Visa Spend Card.
• Share: Children can choose which charities they would like to give money to, and parents must approve before the cash is transferred.

Parents aren’t the only people who can add money to children’s BusyKid accounts. With BusyPay, parents can share a simple QR code that allows grandparents, aunts, uncles, other family members, and even friends to add money—whether it’s a birthday present or a payment for chores. BusyKid charges the giver a $1 fee plus any credit card or bank transaction costs.

BusyKid also allows children to invest their earnings through the app. Doing so requires setting up a separate Apex Clearing account. Children can choose to invest in hundreds of stocks and ETFs with as little as $10.

BusyKid has no minimum age requirement.

In addition to the $4 monthly subscription, BusyKid charges other fees, including 50¢ per declined transaction, $5 for a card reissue, and a $5 monthly fee for paper statements.

Related: Best Greenlight Alternatives

BusyKid Plans + Costs

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BusyKid has a simple, single subscription tier that costs $3.99 per month, which is billed annually, so you pay $38.99 once per year.

Also, people outside of the BusyKid account who want to send money to a child must pay a $1 fee per transaction.

Past that, BusyKid’s other fees are pretty standard and minimal. For instance, it charges a $5 replacement-card fee and a 50-cent domestic fee for declined charges.

If you’re not satisfied, BusyKid provides a 30-day subscription-back guarantee. While it sounds nice, that’s actually a step down from most other cards. I’ve reviewed more than a dozen kid-focused cards, and most of them offer 30-day/one-month free trials—meaning you don’t have to spend anything until you’re sure you’re happy with the product. But with BusyKid, you have to pay up front, then ask for a refund if you’re not happy. It’s a small difference, but one I think is worth noting.

BusyKid Features

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Below, I’ve listed a number of BusyKid’s most prominent features. Like with all debit cards aimed at children and teens, some of these features are for the kids, but others are meant to keep parents happy (and sane).

BusyKid Visa Spend Card

The BusyKid Visa Spend Card is a prepaid debit card that acts as the physical central point of the BusyKid experience. Each BusyKid subscription comes with up to five of these kids’ debit cards, which are intended for use by children ages 5 through 17.

Kids can choose from a small selection of more than 10 designs.

The adults can instantly transfer funds at any time. Kids have to follow the set spending limits, so they can’t overspend as they learn money management skills.

Every debit card is backed by the Visa Zero Liability guarantee, which means if your kid’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.

Related: Best Money Apps for Kids

Parental Controls

Parental controls are essential for parents who want to retain some peace of mind while their kids develop money management skills.

With BusyKid, parents can monitor all transactions made either in the app or with the BusyKid Visa Spend Card.

BusyKid’s parental controls are pretty rudimentary. By using the “Lock Money Transfers” feature, parents can prevent their kids from transferring money among their Save, Share, and Spend areas. Kids will still be able to use the money in these accounts, but each transaction will require a parent’s approval.

Chores + Allowance

Some parents like to pay an allowance to their younger children, and this might or might not be connected to chore completion. BusyKid allows you to pay an allowance to and/or set chores up for your child. For chores, parents can set up their own chores and payment amounts, or they can use BusyKid’s preset chore chart, where chores and allowance are preset based on a child’s age. As kids complete their chores, they can click “I did it!” inside the BusyKid app.

BusyKid pays kids each Friday based on any chores the child has marked “Done” since the previous Friday. Parents will be notified and asked to approve; when it is, it will be deposited into the child’s various account areas depending on how their allocations were set up.

BusyPay

The BusyPay feature lets family and friends instantly send money to a BusyKid account, whether it’s as a birthday or holiday gift, payment for helping out, or just because. It’s easy, too—a child just has to share a QR code, and anyone can pay them. (Note: The payer is charged a $1 fee to use this feature.)

Related: How to Get Free Money [Ways to Earn Money] 

Bonuses + Savings Matches

Several BusyKid features help your children accelerate their earning and saving.

For instance, let’s say your teen stepped up to babysit a younger sibling, or one of your kids got a perfect report card—BusyKid allows parents to pay a bonus to any of their kid’s account areas or even directly to the BusyKid Spend Card.

Parents can also establish a savings match, which is similar to a 401(k) match. Parents simply select a weekly percentage match, or a monthly max that’s dividend equally across all the weeks in a month, and BusyKid will transfer the appropriate amount of additional funds to the kid’s account based on how much they save.

Investing

Learning to invest is an important part of the personal finance journey. BusyKid helps children with that journey by providing commission-free stock trading.

BusyKid offers commission-free trading of stocks and exchange-traded funds (ETFs), allowing kids to start investing with as little as $10. BusyKid provides access to “hundreds” of popular stocks and ETFs—a considerably smaller selection than the thousands of stocks and ETFs available from traditional brokerage accounts, but a sufficient world of assets to get a child started.

Charities

Parents who want to instill the importance of giving back to their children at a young age can allow their kids to donate a percentage of their allowances to charity. Kids can choose among roughly 50 charities, and BusyKid even welcomes suggestions for other charities to add.

You can sign up for BusyKid here.

Related: Best Credit Cards for Kids

Step vs. BusyKid: Our Editors’ Choice Is …

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For many parents, Step’s features simply can’t be beat. Unlike BusyKid (and the vast majority of competitors), Step can help kids build credit. This feature shouldn’t be underestimated as establishing a credit history can save children money once they reach adulthood and need to take out loans, purchase insurance, and more.

Plus, Step offers 5% APY on users’ savings. Meanwhile, money stored in a BusyKid account isn’t earning anything. Step’s round-up feature boosts savings even faster. Both accounts let kids invest in stocks and ETFs, but you need Step if your kid is interested in Bitcoin.

Step is also the 100% free option, which is important to families on a budget.

BusyKid has a few perks that Step doesn’t, though. There is a degree of customization as children can choose among 10+ preselected card designs. It has a chores feature and an easy way for people other than parents to gift money into the account. The monthly fee is a downer, but it includes up to five cards, so you don’t have to shell out extra money for every kid.

Overall, Step is my recommendation 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.

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 Greenlight, you might want to look at these other highly rated options:

Related: 13 Best Money Apps for Teens [Invest, Spend, Budget + Pay]

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.