How To Talk To Your Kids About Credit Card Responsibility

Teaching Kids to Use Credit Card Responsibly
Tips from Privacy Matters123 to Help you Talk to your Children about using Credit Cards

Should you allow your child to have a credit card?
Many people with kids feel that giving a credit card to a child is like combining fuel and fire
They feel that you just cannot trust kids with a credit card
Others feel that it is sensible to teach your kids to use credit cards judiciously at an early stage
This helps them avoid more serious blunders when they are adults
The lessons learnt in childhood are the ones that are retained forever

Teach your kids how to use a credit card so that they can avoid serious financial problems as adults…
Privacy Matters123 shares tips that help you teach your kids to use credit cards sensibly

Avoid overspending
Overspending is far more probable when using a credit card as compared to cash
The extent of deliberation that one does when buying an overpriced pair of jeans with cash is higher
Handing over the plastic for a swipe is far easier and takes no effort at all
Overspending is a concern with credit card usage that even adults fall prey to
Ask your kids to compare the cost of the item that they are about to buy with something that they value
For example, make them compare the cost of the overpriced pair of jeans with the video game consul that they really want to buy
This will help them understand the value of money rather than thinking of the purchase as only a swipe

Explain the concept of competitive spending
Kids tend to indulge in ‘competitive spending’
They are inclined to spend more when they go to the mall with friends.
This happens because they want to show off or boast.
Sometimes it is a matter of wanting to belong to a group
Warn your child about this tendency among children
Privacy Matters123 advises that you speak to your child about spending based on
Availability of funds
Individual needs
Personal preferences
Privacy Matters123 also suggests that you ask them to avoid falling prey to competitiveness and peer pressure

Remember the bill at all times
Most teens realize that credit card bills need to be paid
However, they seem to bury the thought in the excitement of the shopping and prefer to tackle it later
It is the duty of the parents to remind children about the reality of the credit card bill
Ask your children to think about how they will arrange for the money to pay back the credit card company
Explain how small charges suddenly seem too high when they have to be settled
Discuss how late payment charges and rolling credit can turn into a 2-headed monster in a matter of months

Practice what you preach while teaching credit card responsibility to your kids!
Privacy Matters123 suggests that you could use a debit card as a stepping stone to credit card usage too!

How To Talk To Your Kids About Credit Card Responsibility

by Privacy Matters 123 on Mar 17, 2010

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How To Talk To Your Kids About Credit Card Responsibility — Presentation Transcript