Forbes Review on Greenlight

0
260

Author: Rebecca Lake

Date: Jul 6, 2022

Link: https://www.forbes.com/advisor/banking/greenlight-card-review/

Introduction

With technological society experiencing fast advancements, how children can manage their finances has come into question. Although a few companies have taken a step forward in responding to this concern by providing credit and debit cards available for children, Greenlight, founded by Tim Sheehan and Johnson Cook in 2014, has created a card where all investments, savings, and budgeting can be done in one place. The card is 100% safe with Federal Deposit Insurance Corporation (FDIC) insuring for up to $250,000. Children can even personalize their cards with a selfie of themselves. Greenlight’s mission to help children grow with ample money management skills to grow into financially savvy adults has shown extreme success with more than 4 million families with an opened account as of 2022.

How it Works

The standard plan comes with a debit card, which up to 5 children can be added to–the parents having free access to sending money manually or even automatically. Parents are able to set boundaries for children’s spending and monitor where transactions are taken place while the children are able to track their own spending as well with receiving tips on how to save, spend, earn, and give.

Parents are also able to:

  • Monitor balances
  • Track spending and purchases
  • Manage account controls
  • Add chores or other conditions for receiving transfers
  • Establish direct deposits
  • Set limits for ATM withdrawals
  • Set limits on purchases
  • Freeze or unfreeze kids’ cards

Similar to a traditional bank, children are also able to receive 1% savings reward if they have achieved set goals.

The card, however, does have limitations on where it can be used at:

  • Wires or money orders
  • Security brokers or deals
  • Dating/escort services
  • Massage parlors
  • Lotteries
  • Online casinos or online gambling
  • Horse racing and dog racing
  • Non-sport internet gaming
  • Cash back at the point of sale

Setting Up an Account

The standard plan comes with a 30-day free trial, but afterward is $4.99/month.

Some information Greenlight asks for:

  • Your name
  • Names of the children you want to get a Greenlight card for
  • Mailing address
  • Email address
  • Your date of birth
  • Your Social Security number
  • Existing bank account information

Greenlight Pros

  • Parents can set controls for spending and deposits, including tying transfers to accomplishments like completing chores, doing homework or getting good grades.
  • Notifications allow parents to track their child’s transaction history in real time.
  • Certain purchases are automatically blocked by Greenlight.
  • Greenlight’s savings rewards, debit card round-ups and cash back on purchases helps kids reach savings goals faster.
  • Kids can learn investing from an early age with a Greenlight + Invest plan.
  • Cash rewards offered with Greenlight Max can help kids grow their savings.
  • Kids’ balances are FDIC-insured up to the $250,000 limit.

Greenlight Cons

  • Greenlight isn’t free—you’ll pay $4.99 to $9.98 per month for this kids’ debit card and personal finance app.
  • You’ll need to upgrade from the basic plan to unlock enhanced features and benefits.
  • Greenlight doesn’t work with money transfer apps like Venmo, Apple Pay or PayPal, so you can’t use them to make deposits or transfers.
  • You can’t add cash to the card at a bank or other in-person location as you can with some prepaid debit cards.

Analysis

Greenlight is a great solution for families who have difficulties managing their allowance with non-cash payments becoming less relevant. Although the price is rather unfortunate, this card has many flexible capabilities that are easily manageable for children and parents. Its 1% saving reward and the steps to set up an account would understandably attract many families as it provides realistic practice to prepare the children before getting access to a real debit and credit card account.

This solution also gives the harsh reality of reliability. Similar to Greenlight’s reputation of being registered with the U.S. Securities and Exchange Commission (SEC) and a member of both the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), to become a recognized and trusted product, it will become a necessity to have not just Huntington, but potentially other communities approve the solution.