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Credit Cards And Kids – The Right Plan Of Action
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A credit card is form of banking cards that allows users to pay for goods and services based on the card holder’s promise to pay for them over a period of time. In this process, the holder of the card is granted a line of credit for consumption, from which the user can borrow money for payment to a merchant or as a cash advance.
With the growing trend of modern day gadgets and vehicles, more and more children want to buy these modern tech gadgets keep up this trend. However, it is the parent’s financials that get affected in the long run, which is then reflected on their credit history. A credit card for children is an ideal solution, if it is well managed. However, you must do so carefully and for the right reasons. Here are some of the reasons to help you along the way.
• Learning to Build Credit History
Like every journey you take, you will need to have the perfect plan for financial training. This is also the same with your child’s financial journey. This is an ideal way to build a strong foundation for your child’s credit history in the future. Here, you child will learn to get into the habit of building credit history on his own terms and familiarize himself with all the workings of financial world. With a right credit score, he can avail financial loans in the future very easily and without any problems.
• Avoiding Impulsive Habits
As a child, you are often spoilt with your demands and choices being fulfilled by your parents. However, if given the same choice to children, they will have to choose carefully before they indulge in their own demands. Not only will your child be forced to look at his purchases on a regular basis, he will have to develop therationale thinking for his or her each decisions. Thus, he/shewill gain an insight into impulsive thinking. He develops a responsibility to repay his purchases on a monthly basis too, thus securing a good credit history.
• Understanding the Safety of a Credit Card
As your child begins to grow up, and make life changing decisions, he will be prone to make mistakes. And this is no different when it comes to making mistakes in financial decisions too. However, with a credit card can operate as a safety net. You can help them and become well assured that they do not suffer long lasting permanent consequences of their decision. Not only are their decisions protected, since they are under you financial roof, but you will be also be able to watch out for suspicious deals, false promotions and possible identity theft.
Author Bio :- Neha Sharma; a finance student, comes with a varied experience in credit card and the various factors that go into it. Thus, it comes as no surprise that she would like to share her knowledge with the public about her experience
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