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Helping Your Child Build Credit

Helping Your Child Build Credit

If you are the parent of a teenager or a child who will soon become one, you should consider helping them build credit from a young age. Teaching your children how credit cards work can help them integrate sound spending habits and a strong understanding of money. As a parent, setting your kids up for success is probably one of your top priorities, and helping them build credit is a great way to do this! 

Why Should You Help Your Child Build Credit?

There are huge benefits to having a good credit score, and it can be difficult to build credit from scratch. When your child reaches the age to start making major purchases or applying for loans, a strong credit score will help them significantly. Starting your child off with healthy spending habits and a strong understanding of credit will help them immensely down the line; it is better for them to make small mistakes at a young age than potentially drastic ones later in life! Giving your teen a credit card can also be an opportunity to teach them about managing money and making responsible financial decisions. You can help them set a budget, keep track of their spending, and understand how interest and fees work.

When Should Your Child Have Their First Credit Card?

Because children cannot open a credit card until they are 18, you may consider adding them as an authorized user on your account before then. Doing so could help them establish credit history, ensuring they will be better qualified to open a good credit card when they are old enough. Regardless of the reasons you choose to give your child a credit card, most parents agree it is a good idea for teens to have one in case of an emergency. Ultimately, when your child first gets a credit card is up to you, but they should be prepared to have a credit card by age 18 or before going to college. 

How Do You Teach Your Children to be Responsible?

Ideally, your child should have a strong sense of financial responsibility before they are old enough to open a credit card. Teaching your child about money can begin at a very young age, even through abstract methods. If you are going to be responsible for paying your child’s credit card bill, sit down with them each month and review their spending habits to assess whether or not they are using the card responsibly. Setting limits and establishing the difference between wants and needs will help your child make smart decisions, and also help them down the line when using money of their own. Make sure they understand why you have given them a credit card –  it’s not a gift of unlimited spending. If your child opts to spend their allowed funds on a purchase you do not agree with- let them! As long as they are spending within their limits, they should have to learn for themselves which purchases are going to satisfy them in the long run. 

What Type of Card Should They Have?

There are many different options for credit cards- and your child should understand the difference between them before they look into opening one for themselves. If you are choosing their first card, you would most likely want to open one that offers low-interest rates, low fees, and a manageable credit limit. This type of card is great for a teenager’s first experience using credit, as it will not cost you very much and lowers the risk of your child overspending. 


Setting your child up for a successful future is an admirable feat, and teaching them proper money management skills can go a long way! No matter how you decide to help them build credit, your child will thank you down the line for the smart decision-making skills you have imparted to them. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser