Paying with a card is convenient, but it can be mysterious to your kids. When children don’t see you hand over cash, it’s easy for them to misunderstand what you’re getting and what you’re paying. This is true for online purchases too.
Some topics may be sensitive for your family. Keep in mind that children absorb much more than the words you say—they’re aware of your moods and attitudes too. Start a conversation when you sense it can be productive and comfortable.
For young children (ages 3-5)
Below are ideas for how to approach a conversation. For young children, conversations don’t always need to be about dollars and cents—instead, you can help them build the self-control, planning, and problem-solving skills they’ll need as adults. You can also try to work into the conversation other skills that your young child can work on, like practicing counting, waiting for what they want, thinking flexibly, and staying focused. See more about milestones your young child is reaching and how to help them.
Thinking out loud
When you buy something with a card, try thinking out loud. You could say something like, “It’s more convenient for me to use my credit card instead of paying in cash, so I’m giving the store my card. They tell the card company how much I’m spending, and later the card company sends me a bill and I pay that at the end of the month.”
Help your child think about the math involved. If your child already understands money and counting, ask how you might pay the amount in cash instead—how many dollar bills, how many quarters, dimes, nickels, and pennies.
For school-age children to preteens (ages 6–12)
Below are ideas for how to approach a conversation. At this age, your child can build habits, values, and rules of thumb to support future financial well-being. You can try to work into the conversation other ideas that are appropriate for your preteen, like how to help them fit their experiences into the world around them, establish a system of values, resist peer pressure, and build automatic habits. See more about milestones your preteen is reaching and how to help them.
Explain that credit cards can be a convenient way people borrow money for the things they buy, and that the loan has to be repaid—with interest added if it’s not all repaid right away.
Discuss advertisements you see—in the mail, in stores, on television, or online—and any special offers. Think about how those special offers work and how you decide if you’re interested or not.
For teenagers and young adults
Below are ideas for how to approach a conversation. You can also try to work into the conversation other ways your teenager can practice money skills, like doing their own research, comparison, and decision making. See more about milestones your teenager is reaching and how to help them.
Help teenagers practice managing credit cards responsibly by listing out all the possible costs of a card: fees, interest charges, penalties, and other costs. Then, list the benefits: tracking spending, convenience, security, rewards, and anything else that you consider important.