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Safely Introducing Kids to Credit and Debit Cards

steps to take to help young people learn good financial skills

When is the time to start teaching your child about money management? We encourage you to start teaching the children in your life about finances young with a savings account that can be opened at any age with a parent or guardian as a joint owner. As a child grows, they will likely start to ask about spending their own money and eventually want a debit or credit card.

Giving a teenager a debit card for the first time can be an exciting (or nerve-wracking!) time. There are different options for first-time debit card users that can help control spending or provide nearly total freedom for the card holder depending on their needs. One option gives the debit card holder the ability to carry a card in their name at the age of 16, but the card is limited to six transactions per month. Gabrielle Porter, WESTconsin Member Services Representative believes, “this is a great steppingstone to introduce a teen to managing their finances with limited risk.” Alternately, for those who want to provide their teen with the ability to manage their finances more broadly, parents or guardians who have a joint savings and checking account with their teen can set them up with a debit card that has no usage limitations. Either option is a great step in helping a young person understand how to manage the money available in their checking account.

While a debit card lets a young person spend money in an existing checking account, what is the best way to teach them about credit? One way is to add the teen as an authorized user on a parent or guardian’s credit card. By doing so, a young person can begin to build a credit history and learn healthy (or curtail not-so-healthy) financial habits with an adult’s oversight. “Credit and managing a credit card can be a hard concept to understand at first,” Porter says. “Using a credit card as an authorized user on a parent or guardian’s account is a way to make sure your teenager understands the benefits and potential hazards of using a credit card before venturing off on their own.” Becoming an authorized user on a credit card as a young adult can lead to a better credit score and better money management over time.  At the age of 18, a teenager can make the decision to open a credit card in their own name and will be solely responsible for their spending and credit.

Like almost everything else, money management is a skill set that develops over time. Using and managing a debit and credit card are important parts of a healthy financial picture. Giving a young person the opportunity to develop this knowledge early and with adult supervision is a great way to help prepare them for managing their finances independently in the future. Additional financial education and product information is available from WESTconsin Credit Union at westconsincu.org.


Kayla Toufar is a content developer with WESTconsin Credit Union, a community partner of Chippewa Valley Family.


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