You just know this is coming. From the time your child was born, you dread the day when she becomes self-aware. Now she is starting to enter the phase of peer pressure and starts having serious crushes on boys that have yet to fulfil puberty. And the latest headache your daughter has given you is the dilemma of whether to issue her a supplementary card on your name.
If you look at this pragmatically, there are actually some pros on top of the cons that you can only think about. The first one is that your child will have an early start in managing credit. The truth is that if you are able to communicate clearly to her about responsible usage, you will not be pulling out your hair as frequently as you think.
The good thing is that the market has prepared for your dilemma long ago. Issuers have long conceptualized products that meet your very needs. You will be able to win over your child’s favor and at the same time protect yourself. Go out and research what are the types of cards available that was created for parent and child. Then shortlist 3 of them to compare which is best for you.
Although many will agree with you that your child could be too young to carry a credit card, at least you can feel more assured that in case of any emergencies, she can have access to money that would be otherwise unavailable. Carrying a plastic card around is also more convenient than carrying large amounts of dollar notes. Not to mention that it is safer as well because in the event of loss, you can report it and be protected from unauthorized transactions. There are also products available where value is stored in a card and you will have the flexibility to add value as you wish. This keeps you in the driving seat at all times.
Even if you refuse your child’s request now, she will be bombarded with credit card offers once she enters college. So you might as well grab the bull by it’s horns and tackle the problem now while you have the power and authority.
Another thing you can do is simple sign up a supplementary card and issue low limit to it. This effectively prevents it from being charged more than the amount that you are comfortable with. It also alerts you when a growing unhealthy habit of spending is starting to get into your child’s head. In such an arrangement, remember that it is your credit record that is in the line of fire. Excessive spending and late payments are on you.
What are you afraid of?
Here are some tips what might help you with this complex issue
- Get one with a low limit and preferably no annual fees. The card is not an essential item for your child. They need it more as a social status thing.
- Remind your child of the costs associated with the card. They need to know the implications of abuse to take responsibility on it. It could be a good lesson on consequences for your child as well.
- Make sure to go through each transaction with her. She needs to know that she is not getting a free rise and every purchase will be scrutinized by you. This is so that she will think twice before charging the card without a care in the world.
- Give her examples of how people went deeply into loans or debt resulting in a catastrophe of their daily lifestyles. It would be even better if that example is a real person that is known by the family. Even adults often don’t realize the real consequence of our actions until we see it with our own eyes.
- Accept the fact that she will eventually be exposed to these things even if you refuse to entertain her request now. You are better off having control over the situation now than to have absolutely no idea what is going on in future.
- Explain the value of money to your child. You might be banking an income that is way above the average individual. But that does not change the fact that a hamburger meal costs the same for everyone independent of income. It just takes less than 10 dollars for an adult to have a proper meal whether you are extremely wealthy or living on social welfare. This is possibly the most important idea to hammer into her head.