Advantages and Disadvantages of Credit Cards for Kids

Kids are kids, credit cards are credit cards and parents should not be mixed them if they are good in financial calculations. Credit card is a silent time bomb in a beautiful packing while the kids are devils with their curious mind. Sometimes parents trust their kids and thrust credit cards into their hands. Problems arise while bills come and parents have to pay lot of money to calculate their mistake. However if kids have enough intelligence and use their own mind before using a credit card, it may be a lesson for them too.

Disadvantages of Credit Cards for Kids

Credit card is a financial utility which should be use in an emergency despite knowing this, maximum adults uses it blindly. In this case how we can trust kids that they will keep it safe and secure which is expected from every credit card consumer. Major disadvantages of credit cards for kids are:

• Kids don’t learn the real value of money by using credit cards.
• Kids don’t know about how to be responsible for finance hence they use it without using their mind.
• A credit card is a magical wand for kids with whom they can buy whatever they want. It will rack up high bills resulted in a financial disaster for parents.
• They can misuse credit cards to buy unnecessary particulars, toys, fashion accessories.
• Credit card is not a correct method to teach them financial lessons and they use it foolishly.
• Kids can lost their credit card it means your card is not safe in their hands.
• Kids can misuse your credit card to purchase illegal drugs for some friends.

Advantages of Credit Cards for Kids

Credit card has some benefits too which can be used by anyone regardless their age. However, while we want to hand over them to kids there is only one plus point:

• Kids can use credit cards in an emergency situation especially while they don’t have cash.

How you can avoid negative effects of a credit card for kids

You would wonder to know that in 1999 over 150,000 teenagers filed for bankruptcy in US. In a recent survey this figure is grown up more enough as more than a third of nation’s students have four credit cards with an average credit of more than $2,800. Mostly parents give credit card to their kids so they can understand their responsibility in order to learn financial management for life. Sadly it does not happen and kids use credit cards as a money-generating machine. Instead, giving them credit card you can do following:

• Ask them to maintain your credit card statement as well as give them assignment to make their own analysis from the statement.
• Ask them to make a statement from your credit card bills so you can know that how much money you are paying for per buying. You can give them more assignments to understand the importance and reality of credit cards completely.
• Finally you can give them a secure card or student credit card to test their knowledge and financial discipline as well as for emergency uses too.