The Pulse

Kids With Credit Cards

Moms are 3.6 times more likely than dads to give their kid a credit card

New consumer research from wallethub.com reveals that parents have differing attitudes about when to allow their children access to credit. Reprinted with permission. Visit here for more information.

Moms are 3.6 times more likely than dads to give their kid a credit card, according to a new WalletHub survey released today. Parents can make their child an authorized user on their account and give them their own card tied to the parents’ credit line.

Making a child an authorized user is a good way to teach them responsibility and help them build a credit history before they are old enough to have a credit card account in their own name. However, not all parents decide to give their kids a card. Below are a few key stats from WalletHub’s survey, along with additional commentary to use as needed.

Key Stats

  • 2.4X more daughters have credit cards than sons.
  • Kids in private school are almost twice as likely to have a credit card.
  • Dads are 3.4 times more likely than moms to monitor their kids’ credit card spending.

Q&A with Odysseas Papadimitriou, CEO of WalletHub:

What is an appropriate age to give one’s child a credit card?
“It’s a good idea to give your child a credit card for emergencies when they are in high school. That’s when young people start to exercise their independence more and more, making access to funds for emergencies increasingly important. Plus, adding your child to your credit card account as an authorized user can help them build some credit history, making it easier for them to get their own account after they turn 18. When they’re eligible to get their own account, set your child up with a secured credit card, and have them fund the security deposit themselves. This will give them good practice without too much risk. But it will be their own money at stake, which is important.”

By law, Americans cannot get a credit card before they are 18 years old. But that doesn’t mean that people younger than 18 can’t use credit cards at all...

What explains 2.4X more daughters having credit cards than sons?
“My guess is that parents tend to see their daughters as being responsible enough to handle a credit card at an earlier age than their sons. However, the need for financial literacy is gender-agnostic. And the kids who are least responsible may actually need the most hands-on training.”

Should parents closely monitor their kids’ spending?
“Parents should monitor their kids’ spending, both to keep them safe and because it can provide some valuable learning opportunities. But they shouldn’t try to be sneaky about it. Rather, parents should discuss spending decisions with their children in order to help calibrate how they think about money and improve their financial literacy. Credit cards make this whole process a lot easier than cash.”

2019 Kids with Credit Cards Survey

By law, Americans cannot get a credit card before they are 18 years old. But that doesn’t mean that people younger than 18 can’t use credit cards at all. An adult can add a minor as an authorized useron their credit card account and share their credit line with the user. While specific credit card issuers may set their own age limits, there is no legal minimum age for someone to become an authorized user. Being an authorized user can give a child the opportunity to learn about fiscal responsibility. In addition, it offers them the opportunity to build credit, as information from a credit card account will also appear on the credit reports of any authorized users. Parents who are worried if their child will really be on their best behavior can set spending limits or make it so that transactions must be approved.

A copy of the full report can be found at https://wallethub.com/credit-cards#survey.