Despite their continuous use by people around the world, credit cards are often looked at with a lot of negativity. Blamed for enticing people to spend more than they actually have, credit cards do lead individuals to overspend and fall into debt crises. However, these statements merely highlight the negative aspect of credit cards. Looking at the brighter side, credit cards provide ease in financial transactions and a peace of mind that is second to none. Moreover, if used wisely, these cards can also push up credit scores and make securing finances in the long run an easy feat indeed. Such is the positive impact of credit cards on credit scores that many financial experts today recommend getting children credit cards of their own. Here are some of the major benefits of getting children credit cards at an early age.
- Building Credit:
One of the major advantages of getting your child a credit card at a young age is to build up his or her credit score as early as possible. By using the card a little and ensuring that all the payments are made on time, up to 35% of your child’s entire credit score can be made to look good. Moreover, by having the card made at a young age, you will further increase the credit score of your child as 15% of the entire credit score depends on the age of the transactions made on the card. Therefore, when the time comes for your child to go out and live on his own, he will already have a credit score that is respected and considered safe by the masses.
- Preventing Impulse Purchases:
Believe it or not, getting your child a credit card made at a young age will actually help you teach your child how to avoid impulse purchases. Although the card might be in your child’s name, you can keep the card with yourself and ensure the card is only used for important purchases (or to build credit). Doing so will put a sense of discipline in your child and help him or her manage finances in an efficient manner.
- Helping the Child Learn From Mistakes:
Irresponsibility with credit cards, such as making late payments, can severely affect your child’s credit score. Therefore, instead of waiting for your child to grow up and potentially damage his/her credit score later on in life, it is better to get the card made at a young age and let your child learn from making mistakes in front of you. While mistakes such as late payments, made by your child, will count and affect his or her credit rating, the mistakes will be reversible by either you or your child once he or she grows up. Thus, with all the benefits that come with building a credit rating at an early age and the competitive nature of the financial world, experts recommend parents to gift a good credit to their children. In addition to this, the best way to gift a good credit to children is by making them financially responsible at an early age. Watch Jason Kaplan from the Credit Pros to learn more about the gift of good credit for your children: