Question 1

What age to teach kids about credit

Accepted Answer

It's never too soon to start teaching kids about credit cards and other aspects of financial responsibility. You can start when your child is still young by taking them to the store with you and talking through your decisions as you shop. As your kids get a little older, you can start teaching them basic money management skills and habits. For example, maybe your child wants to buy a new video game. You might show them how to save up money for a specific goal, either by giving them an allowance or setting aside money for the game yourself. You can also track your progress together and explore different saving strategies.

Question 2

Are there credit cards for kids?

Accepted Answer

No, there's no credit card for kids.

Question 3

Can kids have debit cards?

Accepted Answer

Yes, some banks allow kids to have debit cards before they turn 18. A kid's debit card usually must be linked to a parent or another family member's bank account. Some banks offer early debit card options with features designed for kids. For example, you may be able to set a spending limit, monitor your child's card use, and set up an automatic allowance through your online banking app. You might also disable overdrafts on your child's bank card to avoid overdraft fees.

Question 4

What is credit?

Accepted Answer

On a basic level, "credit" is an agreement between a lender and someone borrowing money. The lender agrees to give the borrower money, and the borrower promises to repay that money later on (often with interest). Any time your child takes out a loan or credit card, they're building their personal credit, a record of their borrowing history.

Question 5

Why positive credit history can be important

Accepted Answer

Make sure your child understands that the financial decisions they make today can have a major impact on their future. A positive credit history may not only make it easier to qualify for the best credit cards possible. Credit usually plays an important role in buying a car, renting an apartment, purchasing a home, taking out student loans for school, and more major milestones. Certain employers may even check your child's credit report as part of the application process. That doesn't mean your kid should be afraid to make a mistake once they qualify for a credit card. If they miss a payment or overspend and hurt their credit score, practicing good credit habits moving forward may help them rebuild their credit.

Teaching Kids About Credit & Credit Cards

Key Takeaways

Did you know?

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