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Bottom Line Up Front 

  • It’s never too early to start prepping your child to make smart money choices that can lead to good credit.
  • Simple things like helping kids save for items they want and opening their first checking account are great places to start.
  • Adding your child as an authorized user to your credit card account helps them build credit and learn responsible spending.

As parents, we want to set up our children for success. From an early age, we read to our kids to help them develop their language skills. We set up play dates so our kids can make friends and learn to socialize. And, we ask our kids to do chores so they learn the value of work. In the same way, you can help your child achieve future financial success with a few simple moves today.

Encourage Saving

Many milestones in life require a good chunk of change. Think about the price of college, a car, a wedding or a house. It’s much easier to manage these financial hurdles by saving up money ahead of time. To help your child prepare for a future of saving, you can encourage them to save for purchases that are important to them.

Whether it’s a new video game, phone or car, they can learn about the self-discipline it takes to save by putting away money in a savings account until they have enough for their purchase.

Open a Checking Account

Once your teen is in high school, it may be a good time for them to open a checking account. A checking account comes with a debit card that makes it easier to spend, helping establish the responsible spending skills needed for when your child has a credit card. And, once they begin to work, a checking account is a useful tool for collecting direct deposits from their employer.

At Navy Federal Credit Union, the Free Campus Checking account has no monthly service fees, has no minimum balance requirement and earns monthly dividends.

Add Your Child as an Authorized User1

Credit history can be difficult to establish, even for adults, but your teenager can easily begin building their credit history by becoming an authorized user of your credit card. This means they’re given official permission to use your card and, in most cases, their activity will be reported to the credit bureaus, helping to build a credit history.

Be sure to establish clear rules for how your credit card can be used. You can even set spending limits for their card to help them budget and control spending. As an authorized user, they can use the card as they please, but they aren’t legally responsible for paying the debts accumulated.

Become Familiar With Secured Credit Cards

While there are no age minimums to be an authorized user, it may be a few years until your child is ready or able to apply for their own credit card. But, one of the best places to start is with a secured credit card. These cards are a good way to teach the basics of credit cards and establish a credit history.

Here for You Through the Years

You can help your child learn smart money habits from the time they’re a toddler until they’re an adult. Learn more about setting up your child for financial success by exploring our resources on Youth Finance.

Authorized users can use your account subject to the terms and conditions of the Credit Card Agreement and Disclosure. You are responsible for paying any charges made or allowed by an authorized user. The account performance will be reported in all the account holders' and authorized users' names to the credit bureaus.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.