For updates on COVID-19 help and service, click here | To apply or start the forgiveness application on PPP, click here.

Kids and Cards – Creating Credit-Capable Students


Mom and daughter holding credit card

April 3, 2017

As parents, we know there will come a day when our children reach that magical age we have all anticipated, yet we do not want to believe it could actually arrive . . . the day personalized credit card offers, emblazoned with our children’s names, begin showing up in our mailbox.

Whether our children are mature enough to handle them or not, these enticing offers are one of the sureties of life. However, by the time they receive this bait to borrow, they will probably make wiser decisions if they have a foundation of financial understanding, which, of  course, comes from you.

Credit, when credit is due

So, how can we prepare our kids to be responsible, card-carrying members of society by using credit as a convenience and not a crutch? Tim Chen, CEO of NerdWallet, offered some excellent insights from the archives of U.S. News and World Report.

First, it’s a good idea to make sure you’ve covered the financial basics with your younger kids, well before anyone is offering them credit. This includes demonstrating basic budgeting – first showing them yours and then helping them create one of their own.

As kids are learning about the power of money, it’s often easier for them to comprehend the concept using cash. Providing a small allowance for their work around the house can help reinforce the value of money, and how a plastic card represents that hard-earned cash. This can then lead to setting up a spending and savings accounts, complete with a debit card and daily limits.

Learn more about the financial basics your student will need.

Beyond the Basics

Once the groundwork is laid, Chen offers several credit-specific concepts, including:

  • Credit cards aren’t free money.
  • The longer you take to make your payments, the more you have to pay.
  • When used correctly, credit cards help build your credit score.
  • Some debt isn’t always bad, but too much debt is definitely bad.
  • Credit cards can add security and rebates that other kinds of money can’t.

“You don’t have to be an expert,” encourages Chen. “Just gain a solid understanding of credit cards before you talk to your child.” This is a great excuse to tighten up your financial chops with resources like these that will help steer you to credit savvy in no time:

  • From the Financial Literacy and Education Commission

When your student is finally ready for a first bank account and debit card, you’ve got help waiting for you. ECCU offers a basic savings and checking accounts for youth or young adults to learn to manage money and help teach the foundations of financial responsibility. 


Category: Common Cents