Your Kids First Credit Card


Pretty much every young adult falls into the trap of credit card debt. This is because credit cards allow for the buy now and figure it out later approach.

It is then important for parents to teach children good credit card habits.

kids credit card

There are a few reasons that parents may get their kids a credit card. These are:

Building Credit

The biggest reason that parents will help to get their children a credit a credit is to help them to build credit. Having a credit history is good, but it’s not the most important reason. Credit scores is not that dependent on how long someone has had a credit card. When you look at it in reality most people that have a credit card with the ambition of building credit often end up damaging their credit score as they use the card irresponsibly.

If you want to help your child build credit then you need to help them in building good habits.

Creating Healthy Habits

Whilst your children are still willing to listen and are under your roof, you need to teach them good habits and a healthy mindset with their credit cards.

The majority of people find that they become overwhelmed with debt because of irrational purchases. You will need to teach your child how to distinguish between needs and wants.

Avoiding Impulse Purchases

You will need to examine your children’s monthly purchases and process the rationale behind each of these purchases. You are able to help your kids gain a better insight into impulsive thinking and buying, which can lead to spending more then they can afford.

As a parent you will also need to enforce timely payments of the entire months charges. This way you will teach them about money and you will help them to avoid high balances and late payments, which can be detrimental to their credit, score.

Creating a Safety Net

Good credit habits are something that parents hope their children will learn on their own, but young adults will make mistakes and will learn from it.

The problem is that these mistakes stay on credit reports for seven years.

The last reason that you may want to get your children a credit card whilst they still live with you is that you can provide them with a safety net. You are there to watch them, guide them and help them if needs be.

The Best Type of Credit Cards for Your Kids

The best time to get your child a credit card is in high school, but rather start them with a debit card that takes the money directly from a bank account.

This allows then to get use to the responsibility of a card and not buying more than they can afford. You should get a debit card account that has an overdraft protection to avoid overdraft fees.

You can get them a first gas credit card when they start to drive. A gas credit card will start them on the right path for when they get their first credit card.

A good time to get them a first real credit card is after they have graduated high school. Get them a credit card that has a low limit, a low interest rate and a low annual fee.

In order for your children to qualify for a credit card and to help them build credit, consider opening a joint credit card account with them. It has to be a new account as just adding your child to your existing credit card account will not help them with building credit.

If your child is moving or going to college then get a family emergency card. If there is an emergency then they will have the funds to deal with it. A family card that can only be used for emergencies only will still make them feel that they have their own card.

When you are looking at choosing a credit card for your child, allow them to do the research and discuss it with you. This will teach them the ins and outs of all the cards on offer and they should never just sign.