Adults, we can all agree that establishing good credit at a young age is extremely important. As a parent, it can be a challenge to introduce a credit card, build good credit, and explain how it can affect them later in life. Keep reading to learn some tips and tricks for getting your child started with a credit card.  

When to Introduce Your Kid to the Concept of Credit 

It is never too early to introduce the topic of credit to your kids, as it is extremely important to make careful money decisions and establish good credit habits. Establishing good credit early not only sets them up for success later in life but will make it much easier to access good insurance, the ability to rent, and apply for a loan when it comes time for that.  

When to Consider Getting Your Kid a Credit Card  

The minimum age for a child to get a credit card and begin establishing credit is 18 years old. As a parent, preparing your child sooner is extremely important before they reach this milestone. It is still possible for your minor to build credit, so making smart choices is crucial to good credit habits and using credit wisely.  

How Your Kid Can Build Credit Early On  

If your young adult is ready to begin building credit with a credit card, it is important to share with them the benefits a credit card offers if used correctly. Children typically have better behavior when it comes to credit when they were educated early on, not only knowing how utilizing credit works. Here are a few tips to share: 

  • Make your payments on time 

  • Earn credit for paying monthly bills such as utility, rent, cell phone, etc.  

  • Pay your bills each month – set up autopay or reminders 

  • Keep a close eye on your credit report and dispute any errors immediately 

  • Don’t open too many accounts 

  • Know what a good credit score is and keep an eye on yours 

  • Watch your credit utilization rate  

How to Teach Your Kid the Difference Between a Credit and Debit Card?  

Most kids don’t typically know the difference between a debit and credit card until they are properly educated, because to them they see you swiping your card at checkout and recognizing it as a general form of payment. To put it simply, a debit card is like cash that you have – cash physically in your bank account that you are using at the time of payment. A credit card is borrowed money, that you will have to pay back using the money you have in your bank account.  

Debit Card or Credit Card First? 

Understanding the difference between a debit and credit card is extremely important for your child to know as a debit card does not help build credit. Using a debit card first will help your child understand and build responsible habits in making purchases before they get to the point of utilizing a credit card as it can be much more complex.  

If you are in the market to get your child started on the topic of credit, we are here to help! Whether they simply need to open an account to start saving, a debit card to begin practicing making transactions, or are ready to get started with their first credit card, contact American State Bank or learn more about your options on our website today.  

Learn how a credit card at ASB works here.