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Credit Cards for Kids: Is It Appropriate?


While your children will be exposed to credit cards at some point in life, and it's likely that they'll even see you using a credit card from an early age, getting unique credit cards for kids in your home can be a risky venture. While teaching kids credit responsibility is an important thing, you must first make sure that it's the appropriate time and situation to do so. If you teach your kids about how credit and credit cards work when it's appropriate, you can help them to make responsible spending decisions for the remainder of their lives.

Considering Age

Children who are too young may not be able to understand what credit is. Generally, children will be able to understand the concept of a credit card and how it works by the time they reach middle school. However, just because they understand the concept of credit, it doesn't necessarily mean that they are able to responsibly use a credit card on their own. Therefore, many parents wait until children are in high school before giving them access to a credit card. Because each child develops differently, it's important to consider your child's unique maturity level and responsibility before giving him a credit card.

Linking to Your Account

One good way to teach your child about credit is to include him in the process of using your own credit card. Show him how you pay for items using a credit card and explain how the credit system works. Then, when you go to pay your credit card bill, include him in that process as well. This helps to teach children that there are consequences to using a credit card to make a purchase and ties in the card to existing money.

You can add a credit card to your existing credit card account. Give it to your child and have it be in his name. In order to curb irresponsible spending, indicate to your child that it's directly linked to your account and that you'll be monitoring all purchases. You can even have your child reimburse you for the purchases that he makes so that the concept of credit is further driven home.

Prepaid Cards

Another good way to help introduce the concept of a credit card and responsible spending to your child is to give him or her a prepaid credit card. This functions in the same way that a standard credit card does in that it can be substituted for cash, but it simultaneously prevents your child from spending excessively. You can use a prepaid card to demonstrate that a credit card is not an unlimited spending tool, but rather something that should be treated as carefully as cash is.

To purchase a prepaid card, or to request a new card in your child's name, consult with your credit card company for more information.

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