The longtime debate about the danger or benefit of credit cards is precisely why my wife and I chose to have our daughters apply for their first card at 16 – while they were still under our roof.
Why did we do it?
- To teach them how to use this financial tool properly. They learned from day one to not to spend more with their credit card than they could pay off each month. If they broke the rule, we would take their card away immediately.
- To show them how responsible credit card use builds a positive credit score. We placed the cards in their names and not on a family plan, so their responsible credit card management would lead to a better credit score. A good score provides reduced rates for future loans, such as a mortgage.
Some employers now ask to review credit scores as a hiring practice for job applicants. Good scores reflect positively on a person’s ability to manage personal finances, thus making him or her more likely to be a responsible employee.
- To keep them safer from card fraud. We knew that using a credit card for purchases – especially online – is safer than using a debit card. So if our daughters’ card information were to be stolen, credit cards generally have more legal protections against fraudulent activity.
- If we don’t teach our daughters to manage money well – who will? Financial stewardship may not be the most important Christian discipline to teach our children, but it’s far too important to ignore.
This article features updates to an article originally published in the Summer 2014 issue of Everyday Stewardship.