As a parent, it’s one of your biggest responsibilities to ensure that your kids are financially secure, especially when they’ve just stepped into their glorious college years. You might think that giving your child a personalised add-on Credit Card is this the right thing to do. But is it really? Will it aid your child in becoming a financially responsible adult or could the opposite happen? Let’s try and analyse the advantages and disadvantages of providing your college-going kid with a Credit Card. Let’s start with the advantages.
Advantages
- You can teach college-going children the importance of money by letting them control their expenses on their own. It helps develop a sense of responsibility and makes them feel grown up.
- Giving your teenager the power to use their Credit Card will teach them how to use credit and how to put it to good use. It will gradually help them build better money management skills.
- It trains them for future. They will realise when it’s a good idea to use credit and when it’s a big no-no.
- A Credit Card is always useful to have in an emergency. You might rest easier knowing that your child has some financial backup.
- It helps keep a track on your kid’s expenses. While cash leaves no trace behind, it’s easy to track what your kid’s been up to using a Credit Card. You’ll finally be able to monitor them without actually asking annoying questions about their spending habits.
If you want good things for your kids, give them a Credit Card along with the knowledge to use it well.
Disadvantages
- Having a Credit Card at their disposal all the time could make children careless with money. They might lose track of their monthly budget and swipe their card everywhere. Instead of learning to be responsible with money, the opposite could happen.
- Reckless use of the Credit Card could affect could seriously affect your Credit Score. That’s right! They use it wrong and you get to pay for the damages, literally. Once your Credit Score has been damaged, it could be an uphill task to get it back to normal. For your own good, it’s better to keep an eye on your child’s spending.
- If they’re not careful enough with the card, they could misplace it quite easily. Now this is something you wouldn’t want to happen. You don’t want to get stuck with all the hassle that will follow, do you?
- Your teen might not necessarily know how to securely shop online. As a result, they could end up being a victim of some scam or fraud, leading to a heavy monetary loss.
Thinking about what to do? Don’t forget that by giving your kid an add-on card, you still have the option to regulate their spending habits by fixing an upper limit on the add-on card. The best part of getting your kid an add-on is that you no longer have to keep withdrawing cash for them. It’s practically impossible to be around them all the time, monitoring their spending. We’re sure you wouldn’t want to do that anyway. This is a basically a way of giving your child pocket money, only smarter.
Now that you’ve gone through the good and bad points of giving your teen a Credit Card, it’s easier for you to evaluate the situation and decide whether you should go ahead with it or not.
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