Could giving a child a credit card prepare them for financial responsibility?

February 28, 2007

In America parents have come up with a new way of helping their children learn all about the responsibilities of money, and that is through a credit card!

Credit cards are known for helping millions of people to get into debt, so for some people they may find it hard to believe that parents are giving them to their children. However, they are given to the children because parents say it makes sense to allow them to have one under their roof before they get bombarded with them at the age of 18.

It is often a well known fact that when children are not allowed to do something, as soon as they reach the age in which it is allowed, they take full advantage of it. The same can be said with a credit card. If they are constantly told not to use a credit card then they are likely to go overboard as soon as those credit card offers start pouring in.

However, these parents do not just give their children the credit cards and allow them to roam free and spend whatever they want on them. Instead they teach them all about the pitfalls which come with credit cards and the traps that you can fall into. This supposedly helps to teach children how to spend wisely and how to avoid getting into debt.

You can certainly understand the theory behind this but does it actually work? Well according to surveys it definitely seems to. You will always have some children abusing the cards, but overall most children do seem to listen to their parents. The average debt that a child gets into on their card is $2,000 but that is only the minority and most stay in the clear.

Overall giving your child a credit card may be a good way to teach them about financial responsibility so it may be worth thinking about.