Parents give their kids a lot of credit.
You give them credit for eating the carrots you send in their lunch and not trading them for the snack-size Snickers some other parents send for their kids.
You give them credit that the mystery fleck of something they just spotted on the couch disappeared anywhere but into their mouth (or nose).
You give them credit for the effort they put into tee ball and ballet class, even though you’re pretty sure their level of coordination will be better suited for, say, debate team when they’re older.
But should you give them actual credit?
1 in 5 Parents Give Their Kids a Credit Card
Nearly one in five (18%) parents give their 8- to 14-year-old kids a credit card, according to the latest T. Rowe Price survey.
That number’s rising fast, too. Just 11% of parents said their kids had a credit card in 2015, while only 4% said they did in 2012, according to Moneyish.
We know you all don’t have a bunch of little tykes walking into a bank to sign up for a credit card (unless your kid is Ava Ryan, in which case, you do you, girl).
Nearly 60% of parents whose kids have credit cards in that T. Rowe Price survey pay the bill for their kids. Because your kid is, well, a kid, you’ll probably have to bear the brunt of responsibility for their credit card. You could add them as an authorized user to your existing card, or find a card that lets you set parental controls on their spending.
Either way, you’re going to want to keep a close eye on their activity.
I mean, you saw the havoc little Johnny wreaked on your living room practicing his pirouettes. Imagine what an 8-year-old can do to your credit score.
2 Tools to Protect Your Credit Score From Those Meddling Kids
Disclaimer: I’m not a mother. And I spend as little time around actual children as I can manage. They seem troublesome.
Here’s what I imagine kids doing with credit cards: cleaning out candy stores and trading their Visas in the lunch room like Pokémon cards.
Is that about right?
Regardless, you’re going to want to…
1. Keep an Eye on Your Credit Report
To make sure the bill from the latest candy-store binge doesn’t jeopardize your financial future, you’ll want to keep a close watch on your credit activity.
To see what kind of activity is affecting your credit score, grab a copy of your credit report anytime from FreeCreditReport.com.
This site gives you a free copy of your Experian credit report, one of the three major reporting agencies. By perusing that, you can see how your credit card debt and payment history — as well as student loan debt, mortgages, bill payments and more — affect your credit score.
2. Protect Yourself From Identity Theft
So you trust your kiddo to spend responsibly. But what about those lunchroom thieves? Little Johnny could lose a high-stakes game of marbles and find himself upside down by the ankles being shaken down for that valuable piece of plastic in his pocket.
Or he could trade it for Janie’s Mastercard, because her mom got her the one with a butterfly on it.
Protect your bank account from Janie’s Hello Kitty addiction with identity theft protection from Credit Sesame.
Every Credit Sesame account automatically comes with $50,000 in identity theft protection insurance — and it’s free to sign up.
Plus, Credit Sesame’s credit report card lets you see your credit score, keep an eye on your credit report from TransUnion (another of the three major agencies) and figure out tons of ways to improve your credit score.
So… what do you say? Do you think credit cards for kids are a good idea?
Dana Sitar (dana@thepennyhoarder.com) is a senior writer/newsletter editor at The Penny Hoarder. Say hi and tell her a good joke on Twitter @danasitar.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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