Should Your Kids Have Credit Cards?

by Stacy Francis, CFP®, CDFA

The children in front of me in line at the grocery store today were no older than eleven or twelve, yet when the time came to pay for their snacks and sodas, they pulled out their MasterCards. I started to wonder, is this normal now? Do all kids and teens have credit cards and – even more importantly – should they?

I started thinking about my son Sebastian. When should he get a credit card? He is only 21/2 but is the right age 10,15 or 20?

This, of course, depends – on everything from your financial situation to your relationship to your children, and in turn, your children’s relationship to money. But generally, I would advise against it. After all, you want your children to develop a healthy relationship to money – one where they spend no more than they earn, preferably a bit less. If money seems to appear out of nowhere (like, out of your bank account) to bail your children out when they get into trouble, chances are they will get themselves into much more trouble later on, when sums and stakes are higher.

There is, however, one major exception: secured credit cards, where you or your children (or both) deposit a certain amount into an account, and your children can learn how to manage money the way most adults do.

If your children are very mature and financially responsible, it may not be a bad idea to allow them to carry plastic as long as you can manage the account with them. But for the grand majority, stick to ATM cards, secured credit cards or good old-fashioned paper bills.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.