Resources for Teaching Kids About Credit Cards
Schools don't typically teach students how to properly manage their finances. If you want your child to be financially responsible, you may need to teach him about money. Credit cards make it easy to spend more than you can really afford, so it's smart to teach about how credit cards work and the dangers of using credit irresponsibly. Use a variety of resources to teach these concepts.
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Websites
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An Internet-savvy child could learn everything she needs to know about credit cards through websites that cater to children. ING Direct's Planet Orange and the San Francisco Federal Reserve Bank's FedVille both offer information about credit cards and how they work in a kid-friendly style.
Books
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If you often find your child with his nose in a book, then a book might be the right approach. You might try something like "The New Totally Awesome Money Book for Kids" by Arthur and Rose Bochner for a factual approach. Younger children might enjoy "Why Did I Get This Credit Card" by Twyla Prindle.
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Credit Card Simulator
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A credit card simulator, like the one offered by Channel One News, can allow your child to see how long it can really take to pay off something that seems like a minor purchase at the time, especially if you're only making minimum payments. Your child can then adjust the minimum amount that she pays each month and see how she saves money and pays the debt off more quickly.
Worksheets
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If you want to incorporate some math into your lessons, you can use credit card worksheets, such as the ones at Education World. These allow your child to calculate how small differences -- like a higher monthly payment or a lower interest rate -- actually make a big difference in the final cost of a product purchased with a credit card.
Prepaid Debit Cards
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If you think that your child is ready for the next step, you can give him a prepaid debit card. This allows him to make purchases within the limit, as he'd be able to do with a regular credit card, but not actually ruin his credit if he makes mistakes. If he has a job, you can require him to continue to pay the balance back every month, making it more like a real credit card.
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References
Resources
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