How old were you when you got your first credit card? It seems parents today are giving their kids more credit than ours did, as in they’re handing out credit cards to kids as young as eight, according to new research from financial firm T. Rowe Price.
The data shows that close to one in five (18%) parents of kids between ages eight and 14 say their child has a credit card. And it’s not just the young teens getting the plastic - 13% of eight to nine year olds have one. We’re talking third graders, people! Plus, the number of parents doing it is on the rise, too. In 2012, only 4% said their kids had a card.
But before you decide to put the power of plastic in your kid’s hand, here’s what you should consider:
- How old and mature is your child? Think about how responsible they are with money.
- Did you set spending limits? Talk about how much it’s okay to spend and teach your kid about debt, budgeting, and being responsible BEFORE you give them a credit card.
- Have you talked about the pros and cons? Help your kids understand the risks and benefits of using a credit card before you let them try it out.
- Did you consider other options? You can start them off with something like a prepaid card or a secure credit card, which lets you put money down and that’s all you can charge.