How You Can Know They Are (or are not) Ready for a Debit/Credit Card

SUMMARY

How do you know if your child is ready for a debit or credit card (plastic money)?

Money.  Parents.  Kids.  Tension.  Maturity.  Focus.  Responsibility.  Nightmare.

You pick which words to assign to a parent and which to assign to a young adult.  You'll probably select "all of the above" for both.  Much has been written about establishing credit, debit cards, credit cards, and more. 

Even reviewing the contract involved in any financial card of any kind is like someone handing you a Webster’s Dictionary and saying “you are responsible for all of it”. 

Today, having a 'plastic' debit/credit card is a status symbol.  Remember seeing photos of James Dean in his cowboy hat leaning on that car....with that cigarette?  Yes, the status symbols may have changed, but the concept fit even us, our parents, and grandparents.  

Statistic:  Reports say over 50% of college freshman have a credit card of some sort, and over 90% as a sophomore do.    A large majority of the students we’ve taught have either a debit or a credit card.  

To heck with the outside world…..how do you know if/when or ever your child is ready to handle this huge responsibility?

They won't take having one seriously until you show them how serious you really consider it yourself.  

 Prove-It Framework

I’m a member of the “prove it to me” parent system.  We are big advocate mistakes made while my child is under my roof.

#1  StairStep

• Can you hand them $20 and tell them to give you back the change, bring the receipt, AND buy what they were supposed to?
• THEN, can you pick a category of spending that needs to happen more than 1x in a week? And give them an envelope with the amount for a week  to do this and it all works out ok?
• Can you extend that to 1 month? Don’t think “yes, I can”.  TRY it.  See what happens.  Practice makes perfect. 

#2. The Money Talk

• Do they know how long you have to work to earn that money?
• If they have a part-time job, can THEY tell you how long THEY would have to work to earn that money?
• Do they understand how much it costs for a big ticket item you are considering?
• Are they ready to begin creating their own spending plan?

#3  The Contract Talk

• Are you and your mini-you ready to read that contract and look for the important points involved?
• Do they understand the concept of a contract?

Note:  they can’t legally have a credit card on their own until they are 18 BUT they can become an authorized user on yours. 

• Lots of pro’s and con’s of this, but my point is there are CRUCIAL bits of information on these contracts whether they be debit, credit, or anything in between.
• “When all else fails, read the directions.”  Have them READ the contract.  That will make an impression. 

#4 Parent Bonus

• This is an opportunity to roll in whatever you think is necessary for them to prove they can and will take carrying one of these financial instruments seriously.  Grades?  Curfew?  Those two come to mind, but you can make a case that those do help you know whether they are ready or not. How do they treat their other possessions that hard earned money was spent for?  
• Sky is the limit on this one - - - but your child’s overall approach to life is huge. What an opportunity to encourage them in this manner but looping it into the decision making process on ownership of a card.

Then, if all of this can be answered yes and you are comfortable, I would sit down and write your own parent-contract IN ADDITION to the contract involved with the actual plastic involved. 

• What do you expect?
• What do they expect?
• What’s “ok” to buy with it, what isn’t.

Notice we didn’t cover whether to do a debit card, a credit card, or something in between, or nothing.  There are oceans of information on those topics.  Of course, a big consideration is who is responsible for the payment on these cards.  Is this an extension of the family budget and they are just helping you out by being able to purchase things and you are carrying the payment burden?  OR is this a card that they are personally responsible for paying for?  Either way, before you even begin to consider if/what on approving their getting a card, use this framework to help you see if they are even ready.

Have a GREAT week and 

YES, You CAN Have Success in the Middle of it ALL