3 Credit Card Tips to Share With Your Children Before College

It is as essential to talk to your child about credit cards as it is to teach them how to drive. Most children and teenagers look forward to getting a credit card, but mostly for the wrong reasons.

Tackle the misunderstandings early and when the time comes, your kids are most likely to be knowledgeable credit card users.

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If you’re sending your kid to college and planning to send them off with a credit card, here are some things you need to know.

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Make Them Aware That It’s Not Their Money

Often children grow up thinking mother and father’s credit cards are magic. But, the more it takes, the more it costs, and that money must be paid back.

The first thing to share with a child getting their first credit card is that a credit card only allows them to use the money of somebody else. The bank agrees that a cardholder will borrow some money as long as it is repaid.

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The balance can be repaid in a single instance or over some time, but your child should be aware that the longer it takes to repay the balance, the higher the interest. They also need to know how and when interest is paid.

Explore cards with 0% APR Periods

Consider opening a credit card, which will allow them to shop without earning interest during a promotional period for large-ticket items like laptops and other school needs and essentials.

Make Sure They Are Not Missing Payments

Parents have tremendous patience when it comes to their children. But, children need to know that not everyone is as forgiving, especially when it comes to late payments and late fees.

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Explain to your child the expense of a skipped payment. Banks may call, send mail, and can ultimately want to sue, for an unspent credit card balance.

Credit card firms report missed payments to credit bureaus, and with enough of them, can destroy your child’s credit score and their immediate and intermediate financial future.

If you co-sign your child on the credit card, make sure that they understand that their credit card abuse penalizes you. Just like the investors, if your loan is on the line, you won’t be patient. Have a single-error cap, such as one missed payment or one non-restrictive transaction, before closing the account until they are more responsible.

Only Use the Credit Card if You Can Pay Back What You Borrowed

This advice is probably the exact opposite of what your kid feels about credit cards. But fees they can not afford to pay back lead to credit card difficulties such as default credit card payments, late fees, rising interest rates, and a bad credit score.

When your child gets a credit card, they must get used to worrying about its payment. Do not rescue your child from their mistakes in order to help them learn financial boundaries.

Children have a better chance of being responsible for their finances when they know that mom and dad won’t cover their mistakes.

Make Sure Your Child Is a Conscious Spender

Credit cards may be a strong possibility for peer pressure or exploitation by marketing. Ensure sure your child knows the importance and existence of ads everywhere.Teach them to make rational choices when spending by avoiding impulsive purchases.

Speak about their peers and how they should objectively think about their choices. Your child, not their peers, and definitely not TV and internet advertisers, pays for the bill and should therefore be intentional about their purchases.

3 Credit Card Tips to Pass of to Children Before College
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Conclusion

These tips will help your ensure your child takes their new credit card seriously. Their behavior when using the card in its initial months, under your supervision, will help them gain experience using credit products in a health way.