If you let your kid borrow your plastic to buy something online, there’s about a 50/50 chance that you’ll end up regretting it.
That’s what we found in our latest survey at CompareCards.com, which looked at the volatile mix of kids and credit cards. We asked parents with kids under 18 about everything from whether you had let your kid borrow your credit card or debit card to what is the ideal age for someone to get their first credit card.
The biggest takeaway? Mom and Dad are often willing to let their kid borrow their plastic, but it often doesn’t work out.
Some other key findings from the survey:
- Nearly 1 in 3 parents with kids under 18 said their kid had used their credit or debit card without their permission or knowledge.
- Men are much more likely to lend their card to their kid and much more likely to say they’d been burned.
- Americans tend to agree that 21 is the best age for someone to get his or her first credit card.
- Nearly 70% of parents with kids under 18 said at least one of their minor kids has some type of financial account, and a savings account is the most common choice.
- Seven in 10 Americans said their parents were good financial role models.
As any parent knows, there’s no one-size-fits-all answer when it comes to what’s best for kids. Your 10-year-old may be mature enough to handle borrowing your credit card from time to time, while your 17-year-old may be completely unworthy of being entrusted with your card. However, most kids are somewhere in between, and the choices are rarely simple.
My preference is to give kids experience with money as early as possible. That way, they can make mistakes while the stakes are low, so they’ll be better equipped to avoid mistakes when it really matters. Today, it often falls to parents to provide that experience because it is no longer as easy for someone under 21 to get a credit card. Twenty years ago, college campuses were overrun with banks handing out credit cards to anyone who would sign up. The law doesn’t allow that anymore, which is a very good thing. However, one downside of that change is that more people leave college and enter the real world without any experience with credit. That can lead to some real financial issues later.
So how do you protect yourself when lending your kid your card? It’s all about communication. Ultimately, kids are kids, and they’re going to do dumb things from time to time. Knowing that, you need to be certain from the beginning that your kid knows what you expect from him and what the consequences will be if those expectations aren’t met. It might make for some awkward dinner-table conversation, but it’s better to have those talks then rather than when disaster has already struck and tensions are high.
