Helping Kids Understand Credit
No comments have been added
Teaching Kids about a Visa Card/Credit
- Start with the Basics: Teach Patience and Self Control
- Start teaching this concept early, even with toddlers!
- Teach your kids to wait patiently for things they want.
- The more practice with these skills, the better.
- Teach them to Ask Questions when waiting for something
- Model this step when you are out buying things. (They learn so much just from watching you!)
- Why do I need to wait for this?
- Do I really need or want this?
- Practice Borrowing Money at Home
- When they come to you asking for an item, give them the choice to save up on their own, or borrow money from you.
- Decide on a date that the money will need to be completely paid back.
- Add more to the amount they owe, if they don’t pay back the full amount on time. (Teaches them about interest!)
- Use Teachable Moments Every Day
- As they get a little older (10-12) explain that good credit means they repay their debts on time.
- When looking around at houses or cars, teach them that credit will affect what kind of house they can buy, what kind of car they will drive, how much money they will have to pay back with interest…etc.
- Sign them up for a Teen Visa
- After following the previous steps, they should have an idea of what credit is.
- The card can help them get some hands-on practice.
- Help them read their monthly statements, and set up a plan to make their payments on time.