I’m Convinced Giving My 12-Year-Old a Credit Card Was Smart

  • My parents taught me how to use a credit card responsibly by adding me as an authorized user.
  • I decided to do the same for my daughter when she was 12, but she has to ask to use the card.
  • The lessons from my parents stuck with me – I’ve never been in credit card debt and I hope my daughter hasn’t either.

Since 2008, I’ve made a living writing about personal finance, specializing in credit cards, consumer credit, and travel rewards. When I started this career, my wife and I had only one child, a little girl. Today, she is 14 years old and she has a younger sister and brother.

At this point, we’ve already started teaching our oldest child how to use a credit card responsibly, and we have a pretty good idea of ​​what that education will look like as she and her siblings get older. If all goes as planned, it will be a lot like the credit card education my parents and sisters gave me.

How I Discovered Credit Cards

When I was a teenager, my parents named me an authorized user on one of their credit cards. That way I wouldn’t have to carry cash and I could still shop. However, I had to ask permission before using the credit card. For example, if my parents drop me off at the cinema, they may allow me to buy a ticket, but tell me that I can only buy a certain amount of popcorn or snacks. And if I was at the mall and wanted to buy a new pair of sneakers, they would have to agree first.

At the end of the month, my parents would receive their credit card bill in the mail and review the charges with me. They were showing me how they wrote a check for the full statement balance to avoid interest charges. All the time they warned me against carrying a balance and incurring debts.

By the time I was in college, I was old enough to become the primary account holder of my own credit cards. Nonetheless, I received constant reminders from my parents to always avoid interest charges by paying my balances in full. I even remember being frustrated enough with my mother for hammering me on this over and over again.

But it worked. I have always paid my statement balances in full and have never incurred any interest charges. I learned to use my credit cards simply as payment and never charged anything that I couldn’t afford to pay at the end of the month.

How many personal finance experts, and millions more, discovered credit cards

When I started writing about credit cards and meeting my fellow personal finance professionals, it became pretty clear that my experiences weren’t common. Many of my peers who wrote about personal finance brought with them an epic story of debt, enlightenment, recovery, and prosperity.

Many top personal finance bloggers only came into this field after a youthful period of being irresponsible with their credit cards and other forms of debt. Later, they learned how costly it was to go into perpetual debt, and they began paying off the balances they had accumulated, much of it in college and as young adults. The journey usually ends with them showing their readers how to use credit cards responsibly. Alternatively, some bloggers end up imploring their readers to avoid credit altogether.

But for better or worse, I’ve never had these experiences, and I only know how to teach my children and educate my readers to use credit responsibly, without having a personal story to illustrate what’s going on. when you don’t.

My kids are all learning about money and credit in an age-appropriate way

My toddlers, ages 6 and 9, like to carry around a wallet with just their student ID, and maybe a merchant gift card or two. When our eldest daughter was 12, my wife and I decided it was time to make her an authorized user on my World of Hyatt credit card. Letting her have her own card allows her to make purchases when she’s not with us, and it even helps her build her nascent credit history and


credit score

.

We chose this card for several reasons. First, it was a card that we had mainly for its benefits and did not use for our daily expenses. This made it easy for us to determine which charges were his. Additionally, this card offers double points for charges at restaurants and gyms, the two places where she makes most of her charges. And like most cards, there’s no additional cost to add an authorized user.

Chase, like Citi, Capital One, Bank of America, and Wells Fargo, does not have a minimum age to add an authorized user. In contrast, Amex and Barclays require additional cardholders to be 13, Discover requires them to be 15, and you must wait until your children are 16 to be authorized cardholders with a US credit card. Bank.

Just like I was raised, my daughter will ask me before using her card for food, entertainment or clothing purchases. She also uses her card to sign up for climbing competitions at our local gym and others, always with our permission and support.

I hope my kids draw as many of their cards as I do.

As our children grow, we’ll be glad they have a credit card with them when they drive and when they travel. I will also start showing them how credit card statements work and how they get paid. Because we love to travel, I am always happy to share with our children our strategies for earning points and miles with our credit cards. And when each of our children turns 18, I will be happy to ask them to apply for their own card and help them manage it responsibly. Just like my mom did with me, I’m sure I’ll be calling them regularly to make sure they never carry a balance.