Agree spinning reel. All of my kids have been using them since 5 and they pick it up pretty quick. I'd recommend a Pfleuger Purist, $50, and she'll never outgrow it. Pfleuger, IMO, has the best balance andbit isn't even close. Zero wobble even on their cheaper models.
I would go with a 5'6 or 6'0 medium lite rod. The UL rods just don't have enough backbone to cast well for a little kid. Too much action for them to handle and control. Ugly Stick is hard to beat for a kid until they can take decent care of them. Not sure you can break one, even with some effort.
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