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Should You Give Your Child A Credit Card

Many parents argue over the fact whether their teenager should be given a credit card. It could be a good financial move,, but a credit card comes with a lot of responsibilities. If the parents have a good credit standing, adding them as an authorized user on your card can teach financial responsibility to the child, that is, if and only if parents have a good credit score.

Should You Give Your Child A Credit Card

Timely payments and low debt can help you build up a strong credit. However, the impact of the user information that is authorized on the score will be different for different people. If you have a good credit score and your child is an authorized user on the card, it can help them score the best interest rates on loans and make it easier for them once they are a part of the real world.

Risks of handing over a credit card to your child
There is a risk of adding your child as an authorized user. First of all, you and your child will have the same spending power and no liability of repayment. This means your child will have no responsibility to repay the amount. It will fall on you, and there are fewer chances that the child will learn financial discipline. The ideal way is to set expectations, rules, and limits with your child if you give them the spending power. Having an honest conversation and setting rules is the best way of teaching responsibility to your child.


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Some parents may ensure that their child is accountable for the charges, while some choose to set a monthly limit on spending. It is not important to hand over the card to the child; the credit card company will send a separate card under the name of the authorized user that parents may give to their child. In addition to setting rules, the parents should discuss with their child the use of credit and its impact on the credit score. Another alternative is to open a secured credit card in the name of the child. A credit card that is secured requires deposit, which becomes the spending limit of the card. It can help build credit and there is no risk of going beyond spending limit. It can help the child build a credit history without taking high risks.

Communication is key
If you have decided to add your child as an authorized user on the credit card, the first step is to communicate the importance of credit to the child. Your child should understand where to use the card and the liability of swiping it. Ensure that your child does not make unnecessary purchases using the card. If your child is 15 or older, you can ask them to pay for the amount spent by them. This will bring financial discipline in their life and make sure that they learn to take up responsibility for the amount they spend. If treated responsibly, the credit card can teach a lot to the child.

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