Teaching your child how to manage money is essential in today's financial landscape, and one of the most impactful tools for building those skills is early exposure to credit.

But the question isn't if, it's when. Should your child have a credit card? How do you make sure that introducing credit becomes a valuable learning experience and not a financial setback?

Let's break down what to consider and how to introduce credit in a way that builds confidence and good habits.

When Is the Right Time?

Legally, minors under 18 are not permitted to open a credit card in their name. However, many credit card issuers allow parents to add children as authorized users, sometimes as young as 13 years old.

But age alone shouldn't determine readiness. Ask yourself:

• Do they understand the difference between wants and needs?
• Are they managing an allowance or part-time income responsibly?
• Can they stick to limits and grasp financial consequences?

When your child demonstrates maturity and a foundational understanding of money, it may be time to introduce credit in a safe and intentional manner.

Start with the Authorized User Approach

Adding your child as an authorized user on your credit card is a low-risk, high-reward way to begin. They receive a card in their name, but you remain fully responsible for all charges and payments associated with it.

Benefits include:

• Credit Building: If your card issuer reports authorized user activity, your child begins establishing a credit history—an invaluable head start.
• Emergency Access: Whether it's gas money or an unexpected school expense, the card can serve as a financial backup.
• Practical Experience: Real spending decisions teach real financial skills—more effectively than any textbook.

Risks to consider:

• Overspending can negatively impact your credit if balances remain high or you suffer a missed payment.
• They may see the card as "free money" without proper boundaries.

To manage these risks:

• Set clear expectations regarding card usage.
• Use credit card apps or account alerts to monitor purchases.
• Choose a card that allows user-specific spending limits—American Express, for instance, offers this feature.

Teach Financial Habits Alongside Credit Use

Giving your child access to a card is just the beginning. The real lessons happen through active engagement and ongoing conversations.

Cover the Basics First

Before they swipe, make sure they understand:

• A credit card is borrowed money, not "free" money.
• Interest charges on unpaid balances.
• Late payments result in fees and damage to your credit score.

Use Your Statement as a Teaching Tool

Review your monthly credit card statement with your child. Show them:

• How do you track your purchases, payments, and interest?
• What a late fee looks like.
• How much items cost when you fail to pay off your card's balance.

Review Their Purchases Monthly

Make this a monthly ritual:

• Go through their spending line by line.
• Discuss whether each purchase was a need or a want.
• Evaluate how it fits within a budget (even a simple one).

Remember, mistakes are teachable moments. If they overspend or forget a guideline, use it as an opportunity to reinforce the importance of responsible credit use. If they make wise choices, celebrate them.

Encourage Ownership Through Repayment

If your child receives an allowance or earns money through part-time work, tie their credit use to repayment. Whether it's a $10 streaming subscription or a $30 school supply purchase, having them pay you back helps build accountability.

They'll quickly learn that using a credit card doesn't mean avoiding costs—it just means paying them later, sometimes with interest.

Set a Transition Goal

Eventually, your child will need a credit account. Consider setting a "financial finish line"—an age or milestone (e.g., high school graduation or starting college) so they can transition to a student credit card in their name.

This approach gradually removes the safety net, helping them build independence on the financial foundation you've already established.

Final Takeaway

Introducing your child to credit isn't just about boosting their credit score or giving them access to emergency funds. Done right, it's a hands-on way to teach financial discipline, delayed gratification, and accountability before they leave the nest.

By taking an intentional, supervised approach, you'll equip them with one of the most critical adult skills: the ability to manage credit responsibly for life.