Simple Ways to Teach Your Kids How to Use a Credit Card

When should a parent have the first money talk with their child? As soon as their child shows an interest in the topic. There are many misconceptions about money that parents need to clear up as soon as they are able. 

It's essential to do so once they enter college, but it's even better to get started while they're young. The sooner you start, the better. The best way to begin is with some simple money lessons. 

For example, your child should understand how to spend money from an allowance, a job, or chores. You might even offer them a small loan; that way, they can learn how loans work. Kids and teens will come up with all kinds of ideas on how credit cards will help them, but their parents need to talk about how their loved ones might get into trouble if they're not careful.

Here are a few simple ways you can teach kids about how to use a credit card:

Explain What a Credit Card is

Thanks to the internet, TV, and the grown-ups around them, most children have probably heard the term "credit card.” But how many of them truly know what it is? 

Before your child can learn how to use a credit card and avoid getting into debt, they need to know what a credit card is. A credit card is a card that allows you to borrow money from a bank, department store, or another card issuer. 

Teach Them the Purpose of Credit Cards

Once you've explained what a credit card is, it's time to teach them the purpose of credit cards. The primary goal is to help you make purchases now and pay for them later. A wise credit card user knows that credit cards offer one of the quickest and easiest ways to purchase things. 

Meanwhile, a financially responsible credit card user knows that excessive use of the card can lead to dire consequences.

Teach Them How to Use Credit Cards

Many people don't realize how easy it is to get used to a credit card or how hard it can be to go without it. It's easy for young children to develop the habit of "plastic spending" without even realizing it. 

Teach your child to use their credit card responsibly. Tell them to start small and to make every purchase carefully. Help them to plan purchases in advance, and tell them that using a credit card means saving money for something special instead of using it to make frivolous purchases.

Make sure you set a good example by using your credit card correctly. Many adults don't use credit cards responsibly. Spend time with them, answer questions about credit cards, and show them how to use them in a way that will benefit them.

Help Them Understand the Consequences of Credit Card Misuse

After you've explained the purpose of a credit card and helped your children to learn how to use them properly, it's time to talk about some of the risks involved. Some kids never learn how to use credit cards, and they wind up with hundreds of dollars of debt. Give your child a lesson in how credit cards can hurt them if they use them wrong.

Talk to them about how overspending can lead to interest payments, late fees, and more severe debt. It's a good idea to teach them how they're likely to be rewarded with more credit cards if they misbehave. This is a lesson many adults never learn, and their children shouldn't have to learn it.

Make sure your children understand the importance of a credit rating. If they develop bad credit habits, it may affect the rest of their lives. If they can learn to use cards wisely, this can help them in the future.


When you've been preparing your kids all along, they'll be ready to handle the responsibility of owning a credit card. They'll know to make good decisions, and they'll be in a good financial situation afterward. 

Helping your family learn how to use a credit card wisely can help them build a strong credit rating and avoid many of the problems that young adults can face.

If you are looking for fun, digestible, and reliable ways to give your kids a money education, we can help you. Kiddie Kredit is a mobile app designed to educate children on the credit system by completing chores. We are your helpers in teaching your children important financial lessons. Download the app today and start their education sooner than later!

John D Saunders

John D. Saunders is a Web Designer and Founder at 5Four Digital, CMO at Kiddie Kredit and an Automation Expert with a decade of experience building brands online. He's worked with clients including Audi, NAACP and Apps Without Code.