My son recently turned 18. Our local bank suggested he get a credit card and use it responsibly to build credit. Is this a good idea?
Answers | 2
The short answer is a qualified "yes, IF" your son can use the card sparingly, pay it monthly as agreed, avoid frivolous spending, and understand that he is BORROWING money, not waving a magic wand that allows him to buy whatever he wants while paying for it "someday." I'm in the exact same situation with my son now, and told him his first card/credit reference is the single most important one he'll ever have, as it sets the tone for his credit scores and future borrowing options (or lack thereof). Timely payments and low balances compared with credit limits will help him establish good credit scores quickly. Missed payments and maxed out balances will do just the opposite. Hope that helps, Ted
The sooner that your son can establish credit, the better prepared he will be moving forward in life considering everything is credit driven in today's economy. It might even land him better terms when he enters the work force.