5 Ways to Teach Your Child About Credit Cards

What's Hot

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

This Free Software Brings Old Laptops Back to LifeMore

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Report: Walmart to Begin Selling CarsCars

Is Your TV Tracking You? Here’s How to Tell — and Prevent ItAround The House

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

Where to Sell Your Stuff for Top DollarAround The House

11 Staging Tips to Help You Get Top Dollar When Selling Your HomeAround The House

8 Tuition-Free U.S. CollegesCollege

10 Overlooked Expenses That Ruin Your BudgetFamily

4 Car Insurers That Might Raise Rates Even When the Accident Wasn’t Your FaultCars

How to Invest If Trump Kills the ‘Fiduciary Rule’Grow

20 Simple Hacks to Make Your Stuff Last LongerAround The House

12 Surprising Ways to Wreck Your Credit ScoreBorrow

Americans always seem to struggle with credit and debt – parents need to teach the next generation to do better.

I review dozens of credit card offers each week to find the best deals. Check out more on our credit card page.

From the mortgage meltdown to out-of-control credit card use, Americans have a problem with debt. In fact, USA Today recently reported that many households now have a negative net worth. With everything we know about the burdens of credit card debt, parents need to raise their children to be responsible credit card users.

As a father and a credit card reporter, let me offer some suggestions…

1. Teach from an early age

Using a credit card isn’t a taboo topic to be whispered about behind closed doors. Even at 5 years old, our daughter watches me and my wife use our credit cards at stores – and we explain to her that we’re spending real money we worked hard to earn. The lesson here, lost on some adults, is that there’s a direct relationship between the amount earned and the money that can be spent. My parents did the same, teaching me that credit cards were not a magical source of money, and that we had to pay for everything we charged each month.

2. Make your teenager an authorized cardholder

By the time I was old enough to walk around town without my parents, they made sure I had a credit card – but under their account. At first, I was only to use this card with their specific permission or in an emergency. Later, they allowed me to make small charges at my own discretion, so long as I paid them back when the bill was due. The first person who grants a child credit should be their parents.

3. Pay bills together

Children learn a lot about our democracy by joining their parents in the ballot box, and they can gain an understanding about personal finance by sitting down to pay bills together. Discuss how much money you earn, how you plan your budget, and the importance of paying bills on time. If you pay your bills online, your teenager will probably be teaching you some Web tricks before too long.

4. Manage your child’s accounts together

When the time comes for children to open their own accounts, parents should hold their hands every step of the way. Whether it’s a child’s first savings account or a teenager’s first credit card, you should partner with your children from the beginning. Go to the bank with your child and show them how an account is opened. Or do it together online. Then follow along with your child as he or she learns how banking works. By the time you’re called in to bail your adult child out of credit card debt, it’s already too late.

5. Consider prepaid cards

One way to teach credit card responsibility is with a prepaid card. These products, which are becoming increasingly popular, combine much of the convenience and security of credit cards with the safety of debit cards. I recently started evaluating the American Express Prepaid Card, and I’ve been impressed so far. There’s no fee to order it online, no usage fees, and no monthly fees. Reloads using direct deposit or a bank account are free, and refills of up to $500 can be purchased at retailers for an additional charge of $3.95. At the same time, this product offers credit card-like benefits such as purchase protection and roadside assistance.

Bottom line

Parents have a duty to teach their kids strong financial skills. When they take the time to partner with their children and teach them how to manage credit responsibly, the rewards will be immeasurable.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are the author’s and have not been reviewed, approved, or endorsed by American Express. This site may be compensated through the American Express Affiliate Program.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 21 Restaurants Offering Free Food Right Now

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,826 more deals!