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Dangers of digital wallets for your kids

Apple Wallet iPhone
Posted at 4:00 PM, Oct 13, 2021
and last updated 2021-10-13 18:11:47-04

CORPUS CHRISTI, Texas — We can either embrace it or not. We’re living in a digital world and when it comes to money, parents are often looking for ways to teach their kids the basics on how to spend, save or even invest.

As a parent, what if you could track your child’s spending in real time?

One way to do it? A digital wallet. You may not have one or may not know what it is, but there's a real good chance your kids do.

The sound of money could soon be a thing of the past with dollars and cents replaced with a few clicks and then a beep at the cash register terminal. We’re living in a digital world with digital money, and the convenience of having all of your accounts in the palm of your hand.

Lorraine Llanes sees at least a dozen customers a day use their digital wallets at Stripes on Morgan Street in Corpus Christi.

“I think a lot of young people love the fact that with technology these days, it's so much easier,” she told us while helping customers.

It may be easier and more convenient, but right now, conventional wallets still far outweigh the digital ones.

20-year-old Dylan Garcia, along with his mother and fiance, spent the day spending money at La Palmera mall.

The family is what some might call “old school” by using their real wallets compared to the digital ones. For them, it's always been that way.

Dylan would get $20 cash. His mom Ana says, if “he would have good grades. Yes, he'd get cash.”

Cash is what you might call a constant in the Garcia's lives. They’re more comfortable with money in-hand and not on their phones.

That's even now with digital wallets becoming more common than ever before.

We wanted to know if there were digital wallets 20 years ago, if Dylan thought his mom would use it or still give him the cash.

“If she knew, I believe she would,” he told us.

“I'm a bit old-fashioned to where I'd like to use cash but it does sound like a good opportunity to show our children about investing and managing their money well,” his mother Ana said.

We spoke with Katie Galan of the Better Business Bureau serving the Coastal Bend. She says parents tend to have more control of their child's money using digital wallets.

“We just have to make sure the parents are educating children on who they can make transactions with and to make sure that it's only people they know and trust and people their parents are approving of,” Galan reminds us.

So what are the pros and cons? First, the pros.

Convenience. All your cards or digital money in one place.

Security. If your wallet is stolen, you have to cancel the cards. But if your phone is stolen, your digital wallet is safe since it needs some type of authentication to make sure it’s you.

It can track spending habits, help with budgeting and also gives rewards and perks to users.

As for the cons?

Accessibility. You can't use it everywhere you go since not all merchants have it.

And when there's no phone? There's no wallet. If your battery dies, you can't use it until you charge it.

As for Ana Garcia, she's still not completely sold on the idea.

“I'd still be a little leery about using it because so much maybe scams, maybe identity theft,” she told us.

As for Dylan, he's already thinking about it when he has kids.

"Maybe once they get like above 16, yes, but under 16, there's no need for a digital wallet, no,” he said.

There are plenty of apps out there that parents and their kids can use together to get kids on their way to being financially savvy.

One - for example - lets you give them their allowance but not in a way they can spend it all at once. You decide how much they can spend, how much to save, and how much to invest.

Just remember, just like many adults fall for scams, you need to make sure your kids don't either.