I got my first credit card when I was 12, which is the age I am in this photo on a class trip to D.C. My Dad made me an authorized user on his account, and started teaching me about credit. Did I channel the confusing and unrelenting hormonal storm of teenage life into a spree at Sam Goody and Contempo a few times? Yes. Did I learn from my experiences while the stakes were low and I was being supervised? Also yes. Mind you, I was a very mature and responsible kid for my age. And my Dad saw that. He trusted me and gave me the gift of a long credit history as well as an education in what it meant to have plastic.
Trust
Trust and transparency were a big part of getting a credit card. No secrecy, no hiding my purchase patterns. I learned to develop discipline in my money choices—knowing they were going to be seen. Cash doesn’t send a statement at the end of the month to be reviewed and discussed. As a married adult, my husband and I function this way. We do not keep any purchases from each other. Seeds get planted and they grow into lifelong habits.
Most major card issuers allow you to add a minor as an authorized user. Some impose a minimum age, while others don’t. A few cards prohibit cardholders from adding minors altogether.
Confidence
Confidence and competency come with training –like learning how to drive a car, or learning a trade or occupation. But there is no requirement to ensure you are educated in how severely and how easily you can mess up your life with credit.
When teaching kids about credit, there should be rules, dependent on how old your child is, and how comfortable you are letting them have access to open credit. Just remember, the goal is to empower them, not just convenience you. So, it won’t be super helpful to give them a credit card and only allow them to fill up their gas tank. They won’t learn much. There needs to a little bit of freedom—to make choices and mistakes.
Did you make mistakes with credit? Share them. Share all the gory details.
Action
Exercise 1: Let them buy preapproved “needs” for themselves with a credit card. For example, all their toiletries for the month, or a new pair of shoes. And then, review and discuss together. Did emotional or impulsive spending make its way onto the statement? Talk about it.
Exercise 2: If your child is 5 years or older, review a statement with them, if they made purchases or not. Even if they are too young to fully understand, getting into the habit will serve them well.
