Today’s guest blog is from Lauren, who offers our fast payday loan readers with some thoughts about giving credit cards to kids.
Everyone is different when it comes to their finances. Whether you’ve worked from a young age and had to pay for everything yourself, or you’ve had everything handed to you, it’s important to teach your children to be thankful.
There will soon come a time when your child will go shopping with another friend and they see that their friend’s parent lent your child’s friend their credit card. Your child may instantly think, “That’s not fair, I never get to spend money like that.”
You will then find they come home from shopping to tell you all about how their friend gets a credit card and they don’t. So, what do you do? Do you give them one or not? Let’s take a look at it from both sides.
Benefits of giving your child a credit card:
• Giving your child a credit card can teach them the value of a dollar and discipline. You can say, “Spend $20 at the store and make sure you don’t go over.” They will then search around the store to make sure the exact price comes close to $20. It’s just like cash, but just through a credit card. The only difference is that they “could” go over if they were really tempted to. That is where the discipline takes action.
• It also allows your child to track all their spending. This is a great way to see where all their money goes and how much they’re spending. You can then review it with them and ask them if they made any silly purchases they regret. It’s a great way to reflect on your spending.
• You can also teach your child from a young age how to use a credit card. Almost everyone at some point gets a credit card, so why not start now? You could either lend them yours and they could pay you back or you could get them their own to start building up their credit score.
• Your child may be able to accumulate points which could then turn into rewards such as gift cards to their favorite store.
Reasons not to give your child a credit card:
• Depending on your child’s age, it’s just not necessary.
• You may be teaching them that a credit card is unlimited money since they don’t see that money is actually being put into the register.
• They may also learn the habits of getting into debt early. They may think “I can just pay for it later” and max out their card.
• Before a child hits college, it’s common that they will already have debt due to misuse.
• You will now have to worry about your child running into fees such as activation fees, over the limit fees, as well as annual fees. None of these are necessary.
• I’m sure you can agree that you didn’t grow up with a credit card and survived just fine.
• Many financial experts are strongly against the act of giving your child a credit card. They know best, right?
Everyone has a right to their own opinion and really, there is no right or wrong opinion when it comes to this subject. They both have their disadvantages and advantages. You just need to figure out what works best for your child, their habits, as well as their learning experiences. Just because someone else’s child may misuse a credit card doesn’t mean your child will. Same goes for the fact that just because someone else’s child can handle using a credit card doesn’t mean your child will use it responsibly too.