When to Teach Kids about Credit Cards? The Earlier the Better

In playing the Cash Flow for Kids game with my children it got my brain working about this question.  There is no doubt I believe the answer is the earlier the better, but how early?  At 6 and 8, we have already started to introduce them on how credit cards work.  So on that note, what is the next step? What helps establish credit?  Long credit history, on-time payments, low percentage of filled credit vs available credit, number of accounts.  At 24, graduated college, I had no credit score, I started from scratch.   What if I put my kids on as authorized users of one of my credit cards that we use for everyday purchases and pay off each month?  At this early age, we will continue to teach them wise and unwise ways to handle credit.  But when to physically give them a card?  I would say by early high school they will have a card, not necessarily using it but they will understand that they have one.  It will of course be a card that we use, check regularly, and pay-off each month.  By college, credit cards won’t be new to them, they won’t go off and think it is free money, they will already understand the right way to use credit and how  it can be to their advantage to use it.  Maybe that is an area of expansion for me, how to teach kids about money BEFORE they go off to college.  I believe knowledge is power and why shelter kids to something which will impact them their entire adult life.  It is amazing that there are not more courses taught in school regarding money and how to manage it.


~ by debt2dreams on February 22, 2012.

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