Should You Give Your Child a Credit Card?
The personal-finance website WalletHub released its 2019 Back-to-School Shopping Report, which includes the results of a new nationwide survey as well as picks for this year’s Best Credit Cards for Back-to-School Shopping. WalletHub’s back-to-school resources also include a Sales-Tax Holiday Calendar highlighting the best times to buy in each state.
One of the results of the survey said "that 42% of moms think kids should get their first credit card at the age of 21. The same percentage of dads say it should be age 18."
For a child that has proven themselves to be responsible, I would actually say age 16. After all you are allowing them to get behind the wheel of a car at age 16, why not a credit card to teach them some rules of the road?
Having said that...this doesn't come without some serious restrictions. Here are some tips:
Set it up where they have to ask permission ahead of time before using it. Have a very strict rule in regards to this stipulation with the consequences that they will lose the card. In fact if you have a frequent violator, cancel the card without telling them and watch them squirm a little.
If they want something for themselves and they are going to pay you back, email them a bill of what they owe you when the credit card payment comes in. If they are late paying you back, charge them a $35 fee. If they can't pay it, take the card from them.
Start developing a habit of sitting down with you and reviewing their spending once a month. This is a good opportunity to teach them some financial reality. With the right structure in place, a credit card can be a great way to teach your child about money.