What... (i.e. camp, dance class, birthday party)
        
 
Pick a NYMetroParents Region: All Regions   Manhattan    Brooklyn    Queens    Westchester    Rockland   Fairfield    Nassau    Suffolk  

Resources

   

TIPS FOR TEACHING KIDS ABOUT CREDIT CARDS

     Home  >  Articles  > Finance & Insurance
by NYMetroParents Staff

Related: teaching kids about credit cards, teach kids financial responsibility, credit card debt, purchasing apps with a credit card,


Learn tips for teaching your kids and teens about credit cards and financial responsibility. Kids today are using their parents' credit cards for purchasing smart phone and iPhone apps without knowing the consequences of credit card spending and debt. Jeff Hindenach offers advice for explaining credit cards to kids, from credit card debt, to responsible spending, and teaching your children how to budget their finances at an early age. 

It’s a simple fact: Parents do not like talking to their kids about money. In fact, over 60 percent of parents surveyed said they would rather talk to their kids about sex than about money. This could be why so many of those children turned into adults that don’t know how to handle a credit card, which is why this country is $793 billion in credit card debt.

This is why we should be teaching our kids about how to use credit cards, not how to abuse them. So what’s the best way to teach your kids about credit cards? We have some advice that we think will help:

Be your kids’ own personal credit card: Yes, this sounds like every parent’s nightmare, but if done correctly, it can teach your kids a valuable lesson. Make a deal with them that if they want something, you will buy it for them, but they have to pay your back within a month. If they don’t, you’ll add a quarter to what they owe for every month they are late. This will teach them how credit cards work and also the importance of paying off your balance every month.

Add your teen to your credit card: Yes, 13 sounds really young for your kid to have a credit card, but trust us, it will help them in the long run. It will give them a head start on building a solid credit portfolio, which will make it easier for them to buy a car or rent an apartment in the future. The best way to do this is to add your teenager to a credit card you already have in your name. Just make sure it is one with a low limit, so they aren’t tempted to run up a huge bill on your card. It might even be a good idea to apply for a new card and cap the credit limit at $500. Constantly check your account online to monitor your kids spending, and sit down with them every month to go over the bill. Remember, you are putting a lot of trust in your child. If they charge more to the card than you can pay off, it might end up hurting your credit as well as theirs.

Get them their own credit card: You’ve taught them all you can and now it’s time for the baby consumer bird to leave its credit nest. On their 18th birthday, help them choose a credit card to apply for. (Note: Some of the student credit cards require you to be enrolled in college to apply.) You should do this for two reasons. One, the sooner the can start building their own credit portfolio, the higher their score will be and the easier it will be for them to get loans, credit cards, etc. in the future. Two, if you have them apply for a credit card while they are still in high school, chances are that the credit card company will want you to co-sign on the card, unless your child has a source of income. This way, you will still be able to monitor their spending, even when they are away at college. 

For young adults in college, we recommend the Discover it card for Students. It offers a zero percent APR on purchases during the first 6 months as well as five percent cash back rewards on select categories and one percent back on everything else, which are great rewards for a student card.

Jeff Hindenach started his career as a journalist for the San Jose Mercury News and the San Francisco Examiner. He is currently an Editor with NextAdvisor.com, a leading consumer and small business information web site. He specializes in credit monitoring, legal services and security software. 

 

 


Get Your FREE Indoor Activity eGuide!

More Finance & Insurance Articles

Trick-or-Treat for UNICEF
Governor Malloy, Treasurer Nappier Announce CHET Baby Scholars Program
Fidelis Care Opens Ridgewood Community Office
Manhattan-Based Tax Consultant Opens Forest Hills Location
11 Tips to Build Your Retirement Savings

Be a good fellow parent and share this with a friend who would be interested
Email Friend

Local Finance & Insurance Sponsors

Marc A. Mirabella
580 White Plains Road, Suite 205
Tarrytown, NY
914-460-1222
How will you save for higher education! College c...

Robert N. Kandell Insurance & Financial Services, LLC
East Quogue, NY
631-653-3911
All Your Insurance Needs Insurance protection doe...

MVI Mortgage
25 Rosemere St
Rye, NY
877-541-3357
MVI Mortgage: Lowest Rates and Simplest Process i...

Delores Clemons Agency Inc. (State Farm)
562 Kimball Avenue
Yonkers, NY
(914) 663-6688
Our mission of our office is to help our policyhol...

Island Federal Credit Union
Hauppauge - Hicksville - Sayville
NY
631-851-1100
Island Federal Credit Union is Long Island?s secon...
See Our Finance & Insurance Directory

local zones

Nassau

Nassau cont.

Suffolk

Suffolk cont.

Westchester

Westchester cont.

Fairfield

Rockland

Rockland cont.

Queens

Queens cont.

Brooklyn

Brooklyn cont.

Manhattan

Copyright 2014 NY Metro Parents Magazine Site Design: THE VOICE