Credit cards open the door to a brand-new world of financial opportunities. While you might think an 18-year-old might not have much business utilizing one, that is the age when they are legally eligible to do so.
If your kids are savvy and responsible enough, it may be worth establishing credit histories and reports at the earliest opportunity. These experiences all feed into their futures,
Parents can be very strict too. After all, some do not permit their kids to access social media websites until they are 17, which might seem like overkill to some. Household rules and comfortable boundaries vary between families, and what works for some may not always work for all.
Just because you’re child turns 18, it doesn’t necessarily mean they’re immediately ready for all adult responsibilities, such as credit cards. Here are a few signs your kids may have reached that stage.
Guides Are Actively Read
There’s more about credit cards than any one parent can teach. Despite your best intentions, it’s quite likely your kids will not want to be lectured by you for prolonged periods.
Instead, you can supply them with a list of recommended readings. At the top should be Tally’s guide and FAQ titled ‘How Much Of Your Credit Card Should You Use?’. You and your children can learn how credit scoring works, credit limits, and average credit utilization. The benefits of a good rate are also detailed, and tips are shared on using less credit. Many lessons can be learned here.
Read through the information provided yourself. If your teen has any questions and you need to brush up on your knowledge, you’re in a better position to provide them with the latest guidance. Otherwise, encouraging them to read through the materials alone can help them take their time and develop their level of interest.
Balances, credit limits, and interest rates must be understood before your child acquires a credit card. They need to use these spending tools proportionately and tactfully and not assume the card can cover any costs that are otherwise out of reach. Once they respect credit cards, they’re closer to being ready.
Your Input is Welcome
Some children like to see themselves as being fully independent. They may even be embarrassed to receive help from you, accepting it only when completely necessary.
Still, it is best to start using a credit card as soon as possible with some help. If they are open to signing up to be on your account, your positive credit history can carry over to them. Your kids may then access the same or similar loan rates and rewards as you or your partner. They may even be able to finance their first car without you needing to cosign.
One should not be picky with opportunities today. Financial anxiety is building as people increasingly live from paycheck to paycheck, so hopefully, your children will be mature enough to appreciate the ability to kick off their credit reports with a bang. If they are in this fortunate of a position, it is a situation they should utilize fully.
Of course, for this strategy to work, you must be prepared for your credit score to take a hit. Even if you set strict terms, it is still a learning process for your child, and there is always the risk of some steep learning curves that may impact your prospects. As long as you are not planning any major credit card-related purchases shortly, all should be well. Once you are ready, your kids can be too.
Finer Details are Agreed to
If your child is signing up for your credit shenanigans, they should better understand your terms of the deal. These can matter just as much as general credit card rules and laws.
Though your credit score may incur setbacks here and there, some odd mishaps can’t be excused. Therefore, it is a good idea to outline firm lines that cannot be crossed. Once your child understands and respects these details, these ‘finishing touches’ can be the go-ahead you both sorely need.
The strict conditions you should set might include the amounts they will reimburse you personally for their spending. Alternatively, you may expect them to foot the bill themselves. Your terms may also reasonably define what you permit them to buy with their first credit card and under what circumstances.
Few teens enjoy being told what to do, especially as they hit legal adult age. Nevertheless, if they are sensible, they should view your credit card terms as a way to find their footing. They can sample the experience, refine their approach, and learn the full weight of how their spending affects others.
Conclusion
Many young people can be free of financial consequences until they move out in their 20s and fully support themselves. However, a sheltered experience can be endured up to that point. By introducing them to credit cards at 18-19, they can learn more about these responsibilities, preparing themselves for a more financially resourceful future. Just make sure they are ready first.
