Expert gives advice on building credit for kids

Expert gives advice on building credit for kids

HATTIESBURG, Miss. (WDAM) - While there can be some benefits to getting a credit card at a young age, there can be some drawbacks as well.

Mike Morgan, a business administration professor at University of Southern Mississippi, discussed what you need to consider before getting that card.

To start, parents are split on what to do.

“I think about 51%, from the latest surveys I’ve seen, 51% of parents say they really want their kids to have a credit card," Morgan said. “So, they can establish credit and they can teach their kids about credit. That leaves about 49% that don’t want their kids to have credit."

Mike says there are benefits to building credit early.

“The pros of having credit is eventually you’re going to want to buy a car, you’re going to want to buy a house. And while it’s not impossible to do without any credit, but it’s going to be a whole lot easier to buy a car or buy a house if you have established credit."

So, if you decide to get your child a card, what should you worry about?

“Most important thing, once you have the credit card, make the payments on time," Morgan said. “Because the worst thing you can do if you’re trying to establish credit is to establish bad credit right out of the gate, because it takes time to work yourself out of a situation like that.”

If you’re against getting a credit card at an early age and Morgan says that’s OK.

Morgan added parents need to give advice to their child about how to handle their credit card and money in general.

“Talk with your young person, you know, don’t wait until they’re 21 to have that discussion," Morgan said. “We’re all raised to not talk about money. We don’t like to talk about money and then we have a bunch of young adults that don’t feel comfortable talking about money when they really need to talk about money.”

He believes financial literacy is important and starting those discussions early can go a long way.

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