Why You Need to Teach Kids about Credit

KidsAndCredit1

[Update: Some offers mentioned below have expired. For current terms and conditions, please see card agreements. Disclosure: Cards from our partners are mentioned below.]

Iโ€™ve recently been getting offers for prepaid debit cards targeted at young teens. Hereโ€™s the first sentence of one I got a few days ago: โ€œItโ€™s not always convenient to give teens money when they need it.โ€ No kidding! This offer was targeting my 14-year-old son, but the letter was addressed to me and itโ€™s selling me the idea of convenience.

Prepare to start seeing a lot of these offers. On the one hand, I do appreciate the up-front nature of this offer, which by the way, was from American Express. At least the issuer acknowledges Iโ€™m the gatekeeper to my sonโ€™s wallet.

Remember the ill-fated Kardashian Kard and how the marketing was targeted directly at your teenager? I think weโ€™ll see more Kardashian-inspired debit or credit cards sponsored by celebrities. But thatโ€™s only one reason why I believe itโ€™s important to teach young kids about the concept of credit.

[Article: Getting Kids in on the National Financial Capability Challenge]

How early should you start? You can introduce basic concepts around the age of ten. Note that I said concepts, not prepaid debit or credit cards. In fact, if your kid is mature, start as soon as he or she can handle 3-digit addition. But donโ€™t fret if you have a 15-year-old and youโ€™ve never discussed this. Iโ€™m not going to say itโ€™s never too late to start, though. If you wait until they graduate from high school, youโ€™ve waited too long. Itโ€™s essential they develop responsible credit habits before they ever set foot on a college campus.

Kids mature at different rates and only you can decide which steps theyโ€™re ready for. But here are some guidelines to considerโ€ฆ

How to teach kids about credit ยป

Image: _Dinkel_, via Flickr.com

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