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Teaching Children About Credit: An Introduction

By Philip Tirone

I’m about to say something about teaching children about credit cards. And you are probably going to think I’m crazy.

Here goes …

If you have teenage children, you should give them access to your credit accounts.

Now, I know what you are thinking …

What? My teenagers can’t even pull their pants to their waists, much less manage credit responsibly.

And this is exactly why I think you should give kids access to your credit accounts.

Because most minor children never buy homes, apply for lines of credit, or purchase cars with installment loans, most have no credit. And credit bureaus assign really terrible credit scores to people with no credit. In some ways, no credit is just as bad as poor credit.

So if your kids go out into the real world without first establishing credit, they will pay higher car insurance premiums, and they will pay higher interest rates on their first car loan and credit cards. Landlords might not want them as tenants (or you might be required to co-sign), and some employers might not hire your kids.

In other words, your children will be at a disadvantage when they leave the next.

So while I might sound a little crazy for suggesting that you give your teenager access to your credit, weigh the dangers associated with not teaching children about credit cards.

Teaching Children About Credit? If you aren’t, here is Danger Number 1:

As soon as they become adults, your kids will be heavily solicited by credit card companies. They will receive offers for credit cards with astronomically high interest rates and fees. Your kids might walk by booths on their college campus, pick up a credit card application, fill it out, and agree to lousy terms with interest rates that will cost them an arm and a leg.

Teaching Children About Credit? If you aren’t, here is Danger Number 2:

If your kids don’t know about credit cards, and have experience using them, they will likely try to establish credit by using methods that don’t work. So they will end up with lousy scores, and overpay on car loans and credit cards. And, like I said, they might even be turned down for job opportunities.

Teaching Children About Credit? If you aren’t, here is Danger Number 3:

Guess who your kids will turn to when they need financial assistance? Probably you, the parent. And if they are paying high interest rates and unschooled in debt management, they will likely need to borrow money from you.

But as the old adage goes, if you give them the tools to fish and teach them how to fish, you will never need to give them fish again.

Over the next few weeks, I’ll take you through my seven-step plan for teaching children about credit! Stay tuned!

10 responses to “Teaching Children About Credit: An Introduction”

  1. angel says:

    I am loving every lesson! Thanks Philip for the work you do. I am teaching my kid about credit as I am learning along, he is learning with me. At just sixteen years old, he is getting the lesson I should’ve had when I was sixteen.

  2. caroline says:

    Thanks Phil.good information.will be very helpful to my kids.wish i got it when i was young but its never too late.

  3. Stan Ivey says:

    Thanks Philip,This is some great information.Looking for the rest.Youngest daughter is getting ready to go off to college in August,this will be great to teach her this information before she goes off to college.

  4. […] Teaching Children About Credit: An Introduction […]

  5. […] Teaching Children About Credit: An Introduction […]

  6. Marisela says:

    Great Information!! I sure would have loved knowing this as a kid starting out. Thank you for putting this information out there…it is very much needed in today’s economic world for our children.

  7. rob says:

    I just couldn’t leave your site before telling you that I really enjoyed the quality information you offer to your visitors Is going to be back often to check up on new posts

  8. Thanks for the post. It was well believed out and seriously brought residence your points. This really is just the details that I was trying to find.

  9. Fate steals along with silent tread, Found oftenest in what least we dread; Frowns in the storm with angry brow, But in the sunshine strikes the blow….

    Poverty wants some, luxury many, and avarice all things….

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