Issuing supplementary credit cards to your children may sound like a financial nightmare waiting to happen. With kids having little to no information about the right way to handle their finances, the idea of giving them an extension of your credit card may scare you. However, with the right mindset and reminders, your kids can learn a lot from a simple plastic, which they can carry on until adulthood.
(Check out: Thinking Of Getting Supplementary Cards for Your Family? Ask Yourself These Four Reflective Questions First!)
What is a supplementary card?
As the name implies, a supplementary card is an additional credit provided by the credit card issuer to the client upon request. You can give your supplementary card to any member of the family as long as they are at the right age. Some credit card companies allow children as young as 13 years old to use supplementary cards. The number of supplementary cards that can be issued by banks to clients depends on the credit card types and features of the principal cardholder. There are a few banks that can provide as many as 10 supplementary cards.
With supplementary cards, you will not only provide your children with access to instant purchasing power. With supplementary cards, you can teach them the following financial mantras:
1. Imparting them healthy money habits. One good reason why parents should give supplementary cards to their children is to imbibe them with a healthy mindset in using the plastic—all while they’re still young and living under your care. With a credit card in their hands, they virtually have unlimited purchasing power to use. However, telling them the difference between wants and needs will allow them to make sound financial decisions as adults—and it will all come back to the moment you taught them with the use of a credit card.
2. Controlling their impulsive purchases. The biggest misconception about giving kids credit cards is that they will become impulsive buyers; with a ready purchasing power in their hands, they may just swipe the card in a whim. However, it is easy to achieve the opposite when you teach them about the consequences of impulsive buying. By telling them that accumulated debt works by one reckless swipe at a time, they will realize that thinking before swiping is the only way to use a credit card.
3. Letting them learn from their own mistakes. Although parents who hand out supplementary credit cards to their kids will never cease to remind them to use it wisely, there will still be times that things will go out of hand and they will commit mistakes along the way. Let us tell you this: it’s alright if they make mistakes. While they are unavoidable, dissecting their mistakes and showing them the cause and effect of their actions can be a good method to teach them the responsibilities of a credit card user.
4. Letting them learn from your mistakes. One common mistake parents do to their kids is not teaching them about their financial mistakes. Regardless of whether you’re ashamed or just not feeling comfortable discussing your financial health to your kids, the very best money teacher they can have is your experience. By telling them about your previous mismanagement of credit cards, nonpayment of debt, and other financial mistakes you committed, you can steer them to a better path and steer them away from your previous decisions.
Issuing supplementary cards to your kids is never about giving them the power to spend as they please. The endgame of the activity is not to make them dependent on credit cards until they become adults or keep them under the impression that having a plastic spells convenience. By arming them with financial literacy at their formative years, you can be confident that they are more likely to make sound financial decisions when they become adults themselves.