Credit Cards For Kids: Pros, Cons And More

Giving your child a credit card could be a good idea, as long as you're willing to set boundaries and limits. However, some kids might quickly become caught up in the power of the plastic card and abuse it.

While there are pros and cons, the question remains: should your kid get a credit card?

Pros Of Getting Your Kid A Credit Card

One of the biggest advantages of deciding to get your child a credit card is it will teach them responsible credit habits. Before you cosign for a card, you should make sure they understand what the card is for, and what they will be responsible for paying back to you.

Every month, when you get the credit card bill, you should review the statement with them so you can monitor their spending. It can show them the impact of their purchasing behaviors, as well as teach them the implications that occur if you miss a payment or don’t pay off a balance in full.

If your child does make mistakes and spends too much one month, it's better they make that mistake when they are young and learn from them. Those small mistakes can become a good lesson, and ensure that it doesn’t snowball into credit card debt problems later down the road.

It's also a good opportunity for your child to build a credit history before they become adults. It will make buying a home, getting a loan, or leasing an apartment much easier if they can start adulthood with a high credit score.

Cons Of Getting Your Kid A Credit Card

If everything doesn’t go according to plan, getting a credit card can be a costly lesson. If your child spends too much one month and can’t pay the bill, you're still on the hook for it. You must either pay off the balance yourself or risk your credit score taking a hit. Because you are the co-signer, you are responsible for any debt incurred.

Therefore, you should have a contingency plan in place if your child does spend too much in one month. To be safe, keep at least twice the credit line saved just in case your child spends too much. That way, you can avoid huge fees and bills.

Best Credit Card For Kids

Some people suggest that you either start your child with a debit card or add them as an authorized user to your own credit card. However, if you do decide to cosign for them, Discover It DFS Secured is a good option. It has a $0 annual fee and lets your child earn cashback and reward points.

No matter what you decide to do, make sure to teach your child responsible spending habits and how to use a credit card properly.