Preparing your kids for a credit card

Preparing your kids for a credit card

Posted: Updated:
TAMPA, FL (WFLA) -

Here's a question for parents. When should your child get their first credit card?

Getting your first credit card might sound like fun but personal finance expert, Gerri Detweiler of Credit.com says "as a parent, you have to be sure your child is ready to manage that credit card."

Once a child turns 18, and can show the income or assets needed to make the monthly minimum payment, the world of credit cards is open to them. But Detweiler says you have to discuss with them what happens if you can't pay the bill in full? How does interest work? What happens if I pay late?"

When you have a limited credit history, one late payment can drop your credit score like a rock. "One slip up, one late payment for an 18 or 19 year old stays with them for seven years," says Detweiler.

And a mistake can make it more difficult for them to get a mortgage or a car loan down the road.

Detweiler says "You can compare it to a report card and say this is a report card that is going to stay with you for 7 years and make a very big impact on your financial life. So you don't want that D to hit that report card because it's going to be expensive in the long run."

Here are some Eight On Your Side tips when it comes to kids and credit cards. Stick with a low limit credit card. Pay the  balance in full monthly or at least make the minimum monthly payment on time.

Cardhub.com is out with it's list of the best credit cards for college students 2013.
 

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