The youth of today are growing up faster than ever before. Television and other media expose kids to things never before experienced. Now the youth are being targeted to get into the pre-paid credit card chaos by celebrities and other companies out to make a few bucks.
Kids can learn responsibility or gain bad financial habits from the use of credit cards. The steps taken to introduce credit cards to kids will go a long ways towards determining their fiscal direction. Giving kids a credit card of their own could be a way to begin the fiscal lesson, or it could also set kids up to face deep financial woes in the future. Here is some advice about giving kids a credit card.
Credit Cards and Kids
Set rules for the use of credit cards before the card is issued. Limit what can be purchased and why it can be purchased. Write the rules down and go over them with your kids. Have everyone sign the rules and post them where they can be seen and reviewed.
Require income for the credit card. Kids of all ages can take on a little extra responsibility (from raking the neighbor’s yard to cleaning windows). The use of credit should come with the earning of income.
Set up an account to hold the money that will be used to pay for the credit cards each month. Kids should learn from the beginning never to carry a balance on credit cards. Having a separate account that can be used to hold the money earned until the card gets paid off each month will teach the kids a habit of financial responsibility.
Make credit cards a privilege by requiring proof of responsibility in other areas. Kids that consistently do well in school, complete chores without prompting and do extras around the house without being asked will be more likely to show responsibility in the use of a credit card.
Sit down with the kids periodically to discuss the current use of the credit card. Start by meeting more often in the beginning and moving to monthly as the comfort level on both sides increases.
Teach the kids well by introducing good financial habits from the beginning. Balance their earning habits with credit card usage. Keep the lines of communication open. Continue to instill financial knowledge in your kids and the credit card will become a tool and never an issue in their financial future.
The youth of today are growing up faster than ever before. Television and other media expose kids to things never before experienced. Now the youth are being targeted to get into the pre-paid credit card chaos by celebrities and other companies out to make a few bucks.