There are ways of teaching children about credit cards, and although some of you might think that it’s unnecessary to show such youngsters how the credit card system works, you might want to think again when you consider the Payment Council’s claim that cheques will soon be obselete and we are rapidly using less and less cash these days…
It’s true that with the advent of Chip and PIN machines and the new contactless technology, credit cards are becoming even bigger business than they were before. It is no longer a case of not being able to afford something so you put it “on the card”. Now it’s a case of being forced to put it on the card because it’s easier than cash.
However, we’ve talked about the importance of paying off your balance at the end of every month and how you can get away without paying interest if you do this, so this is what you must teach your children.
You see, it’s still good to save up for things. If your child wants something convince them to save their money at home. This will also teach them discipline and patience as well as good money sense. When they have saved up the money they need to place it in the bank before making a purchase with your credit card. You need to explain that you shouldn’t really make a purchase unless you have the money in the bank beforehand, and this the best way of doing it. Make the bank the one who needs to be paid if you’re going to teach the concept of credit and debit card payments, and explain that the money is taken from the bank when you put it in.
Your kids need to know how the credit card society works before it’s too late.