Over one-third of Canadians share a joint credit card with their partner, parent, or child, according to a recent survey conducted by RATESDOTCA. Among the parents who share their credit card with their children, 63% said that managing their children’s purchases is less difficult than it was two years ago.
Sharing a credit card with your child may be a beneficial learning experience, as less than half of Canadians (46%) think that children aged 18 should be independent and in charge of their own credit card, while 34% chose the age of 21, and 15% chose the age of 25. Respondent’s opinions may correlate with their own experiences and lessons regarding credit cards and credit products, as 94% of Canadians rate themselves poor when it comes to financial literacy.
However, many children are no longer solely learning financial habits from their parents. In Ontario, the Ministry of Education has started to implement financial literacy education in the curriculum for grades 4-12.
Teaching your child responsible spending may start early with an allowance and then a savings account. This generally transitions into having a debit card, which is how some parents track their child’s spending. Eventually, when your teen starts having more independence, you may consider giving them a credit card.
Many online purchases, subscriptions, cellphone plans, and teen essentials, require the use of a credit card. Although, teaching your child responsible money management may be the most important reason to introduce your teen to credit.
Teenagers can’t get their own credit until they are the age of majority in the province or territory they live in. This varies across Canada.
The provinces where the age of majority is 18 years old:
The provinces and territories where the age of majority is 19 years old:
However, teens can access a credit card by having an adult co-sign the account or by being added as an authorized user on an existing card. While the primary user (who is responsible for all purchases) must be the age of majority, many credit cards will allow authorized users to be under 18 years old. Age restrictions are different on every card.
Before giving your teen access to your credit limit, know that you may be held responsible for any outstanding balances. Missed payments will also affect your credit score. As a joint borrower, you may face the consequences of your teen’s irresponsible spending. So, it is best to fully educate your teen before sharing your credit card.
Make sure your teen knows:
Therefore, teaching your teen responsible spending habits before giving them access to your credit card is paramount.
As a parent, there are certain limits and boundaries you can impose on the credit card you share with your teen. Slowly introduce your teen to using a credit card by:
As for your teenager, practicing good financial habits may come with a few mishaps and lessons but, hopefully, the result will be a lifetime or positive money management. Your teen should start by:
Knowing where to use a credit card is as valuable as knowing how to use a credit card. Many credit cards can be beneficial when shopping online. Generally, credit cards come with some sort of purchase protection and advanced fraud or security features, while others have extended warranties and insurance coverages.
Never input your credit card information into an unsecured webpage, sites that look untrustworthy, or over public WIFI. There are many scams that mimic large charities and brands, and can be found through email, social media, and similar URLs.
Protecting your credit card information can save you from unauthorized transactions as well as identity theft.
Find a credit card that suits both you and your teen. Whether it is a simple credit card with a low credit limit or one with an added rewards feature, your teen can start to learn smart financial habits before it’s too late.
With RATESDOTCA, choosing the right credit card for you and your teen is easy. Compare the best credit cards in Canada in a few simple clicks.