Dear Breakfast Club, I've have a question and I've heard you help out other listeners so I was hopeing you could help me make a decision.
Will a Credit Card Teach My Daughter Responsibility?
I know it's difficult to get credit when you're starting out, so I'm thinking of opening up a credit card for my 16-year-old daughter, and she'll have to make the payments.
I want her to build a good credit history by paying off the balance each month.
Will a credit card teach my 16-year-old responsibility? Or is it a bad idea because she could overuse it?
Thanks for your assistance,
Gene
4 comments:
Your daughter can estblish her credit bu having a bank acct in her name. Currently at 16 years she does not qualify for a credit in her own name.(she is too young) If you put her as a secondary on your credit card it will not estblish her credit.
your daughter can estblish credit in her name with a bank acct because currently at 16 yrs old she does not qualify for a credit card cause she is too young. If you were to put her as a secondary on your credit card this practice will not estblish credit for her.
Why not open up a savings account for her with a debit card. Then she could manage money she makes babysitting or doing chores, with the flexibility of not carrying cash. Credit cards should only be used if you have the money to buy what you want, but wish to benefit from the rewards the cards offer and to put off paying for the item until the monthly statement comes. Credit cards should not be used to get a "loan" for items you don't have the money for. Not paying the total balance off monthly doesn't make sense. You end up paying a lot more for things you buy due to the high interest rates.
Dear Gene,
The simple answer to your question
Will a Credit Card Teach My Daughter Responsibility is NO. That is your job. Sorry no easy answer here. If you are looking to build her credit rating, you have to wait until 19. My Mom had to get my first car loan when I was 18. As a bank employee I can assure you credit can be obtained early on as a student without much difficulty as long as your daughter has a job. A bank account does NOT build a credit rating. The suggestion that she have her own bank account and that she can spend from it as she sees fit is good but you best not bail her out when she wants that dress from Tag if you are looking to teach responsibility about money. If you give her a credit card, this only puts you on the hook for her spending and your credit rating at risk if the bills aren't paid. For some advice about money, investing and credit I would suggest www.getsmarteraboutmoney.ca, a website from the Ontario Securities Commission. Hope this helps.
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