Chuck Bentley Answers: Should Children Have Credit Cards?

Dear Chuck,

My 13-year-old wants a credit card since her best friend has one. Seems young to me. Would you say yes or no? 

Credit for Kids? 

Dear Credit for Kids,

My first reaction is, no! However, it has some potential upside, so let’s vet this a little closer.

Far too many young people are learning how to be consumers and not producers. In other words, they become expert spenders but have not been taught how to generate income.

Setting that aside, this credit card idea has some possible benefits.

Upside

Giving your teen a credit card is an opportunity to teach responsibility and restraint. Ideally, no child should leave home without understanding Biblical stewardship. Knowing how to manage God’s property impacts one’s eternal destiny. If a credit card can reinforce that, welcome it.

Why Make Your Teen an Authorized User on Your Card 

Authorized users are dependent on your credit history to build theirs. If you have good credit, it will show up on their credit report. Adding your teen to your card has the potential to:

  • Build credit history
  • Teach credit management
  • Grant peace in the event of an emergency
  • Offer convenience in running errands for you
  • Allow you to monitor spending
  • Make online giving accessible
  • Add to your card rewards

Different cards have different age requirements for cardholders. There are starter cards for college students or those with no credit which can be opened in their own name if 18 or 19 years old. If younger, they can be added as authorized users on a parent’s card. Look for no-annual-fee cards, and be aware that some charge fees to add authorized users.

Making your teenager an authorized user on your account while teaching him/her wise use can build a positive credit history for him/her. Timely payments, low credit utilization, and the age of the card will be added to the teen’s history. Good credit will prevent the need for co-signing in the future, which the Bible warns against anyway. The Balance states the following reasons for teens to build credit:

  • To rent an apartment or qualify for a mortgage
  • To rent a car or buy one
  • To qualify for favorable interest rates on loans
  • To gain lower premiums for auto and homeowner insurance
  • To qualify for a job, since some employers use credit scores to evaluate candidates

Click here to read more.

SOURCE: Crown.org, Chuck Bentley