Is It Safe to Give Your Children Access to Your Credit Card?

Most people use credit cards weekly, if not more often. These financial tools can be invaluable for those who may have to pay for emergency expenses or who simply need access to various services and products but cannot afford them at a certain moment. It is also important to mention that credit cards can be useful, as well as dangerous. Maxing them out, forgetting to pay them off, using them too often, or never using them (yes, this is an issue as well), can cause the card owner’s credit rating do drop. However, these cards can also be used to increase an individual’s credit rating, provided that they use them responsibly.

This having been said, is it a good idea to give your children access your credit card? While doing so does have certain benefits, it all boils down to whether or not they are responsible enough not to abuse them. Here are a few things to consider:

  1. You Can Make Them Authorised Users

While it is impossible for underage children to have credit cards of their own (considering that they do not have financial histories), they can use their parents’. The minimum age that is required to become an authorised user of a parent’s credit card depends on the lender. Some set the age limit to children of 13 and over, while others restrict this service to those who are 16 and over. Regardless of this, making your children authorised users of your credit card will allow them to legally become extensions of the card owner. In other words, the credit card agreement will still be based on the parent’s credit rating, but the children will be able to use it.

  • Authorised Users Can Build Up Their Credit Rating Using the Card

While an authorised user is an extension of the primary cardholder, his credit report will track the credit card’s utilization. This includes how often it is used, the amount of money that is borrowed using it, and how quickly the debt is repaid. The main advantage of this service relationship is that the authorised user can expand his financial history and build up his credit rating by using the card.

  • It Is Possible to Set Limits for Authorised Users

Most lenders that offer credit cards will allow the primary cardholder to set spending limits for the authorised users. This enables parents to limit how much money their children can spend using credit cards.

  • Smartphone Apps Can Track How the Credit Card Is Used

Almost all lenders offer apps that their clients can use in order to check their credit card debt, as well as their transaction history. This can be a great tool for parents that want to keep an eye on their children’s spending habits. In some cases, it may even be able for the primary cardholder to remotely revoke the usage authorisation of his credit card.

Generally speaking, credit cards can be extremely safe, and useful, provided that the primary cardholder takes precautions. Giving a teenager access to your credit card can be safe, as long as he is responsible and does not abuse it. Furthermore, in the long run, making your child an authorised user may save him a world of trouble. By using the credit card and ensuring that the debt is repaid (by you or anyone else), he will build up his credit rating. This can be invaluable when he goes to university, applies for a student loan, or tries to take out a personal loan once he becomes financially independent.

Author: Jack

I have spent the last 8 years working for several banks and private lenders and have had the opportunity to get a behind-the-scenes look at how most banking services work. This has given me a lot of insight on how to best use the various loans and lines of credit offered by lenders. Furthermore, I have had a chance to test different strategies of loan repayment to see which one works best. Now, I am looking for ways to share my experience and teach others how to properly use the banking services that are available to them.

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