Do your children know the truth about credit cards?

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The Economic Inquiry found that the average person had approximately £3000 more credit card debt than their parents, and more than £7000 when compared with grandparents; no matter what age.

But why?

Unfortunately, the answer seems to lie in a lack of education.

With an increase in encouragement for young people to take out loans to pay for education before they have even started earning, and immoral lending behaviour from banks who seem to see pre-employment as the perfect time to offer unobtainable credit amounts; the temptation to lend is limitless. And so with an increased emphasis on lending from so young, you would be inclined to think that there must be adequate education to accompany mass of information on what is available to borrow…


A person’s financial education is not taught in schools, colleges or by career advisors. We equip future generations with everything other than financial education! It is our responsibility as parents to education them on the pitfalls of the financial world with it now being a lot more socially acceptable to have debt and go into bankruptcy.

By instilling sensible spending and saving habits in our children from an early age, they are less likely to be misled into borrowing money before they are even earning any.

So how do we teach our children to be more credit-card savvy?

Here are my top 3 tips:

  • Take away the mystery

Often people shy away from debt because they simply don’t understand the basics of a statement and payments. By taking away the mystery and talking through spending habits and statements with your children, if ever they find themselves in a difficult situation then at least they will understand what has happened. Show you children a statement, talk about what your card has been used for, and explain anything they do not understand. Explain to them things like balances, interest, spending limits and payment due dates.


  • Lead by example

Demonstrate sensible spending in front of your children; even let them be added to your bank cards so that they can spend under your watchful eye. But don’t dismay if you overspend or miss a payment; instead make a point of showing your child what has happened and more importantly, the consequence of it.


  • Establish spending habits

Having an emergency saving pot that they can dip into when needed can mean they don’t feel compelled to borrow money. Saving can start from an early age; allocating money to different life elements relevant to different life stages; so toys/fun at a young age; building the habits for having a savings account that can be used for unforeseen circumstances; such as unemployment, home maintenance or even a pandemic (not that that would ever happen eh!)

Additionally, there are some great tips available by The Money Expert about how to teach our children how to use credit cards. Click here to read some.


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