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Teaching financial responsibility: the smart case for giving your child a credit card

“Helping your child build their credit score is an invaluable gift."

Photo credit: Canva

Nearly everything is purchased online these days.

With their colorful designs, customizable parental controls, and growing popularity among peers, it’s no surprise that kid-focused debit and credit cards have become increasingly appealing to families with young ones. Gen Z and Gen Alpha live in a vastly different financial landscape from their parents, and now, digital payments have largely eclipsed cash transactions. From concert tickets to food delivery to school supplies, nearly everything is purchased online. So, how can parents prepare their children for this new digital frontier and financial world that they themselves have not even experienced?

Ask the average parent about giving a credit card to a child, and they'll dream up a nightmare scenario: spoiled kids making endless purchases, unchecked impulse buying, mounting debt, and the development of poor financial habits. However, for the first generation growing up in an almost entirely cashless society, it makes sense for them to understand the value of money and how it’s used sooner rather than later.

Money, tree, financial responsibility, independence, financial literacyThe goal is financial independence. Photo by micheile henderson on Unsplash


According to a 2019 CreditCards.com poll, six million American parents have at least one minor child with a credit card. Winnie Sun, co-founder and managing director of Sun Group Wealth Partners and member of the CNBC Financial Advisor Council, gave her three children credit cards before they entered kindergarten. While this might seem extreme, she believes these early financial practices helped her children develop healthy money habits. In her Op-Ed for CNBC, Sun notes that her own parents added her to their Visa Gold card when she was 13 years old.

"My mom specifically told me that it was for emergencies, or if I had permission beforehand to use it," Sun recalls. "She thought it was a way to help her daughter in case she needed money, but what she didn't know then was that it also helped me learn how to handle credit early in life.”

Credit card, finance, debit card, swipe, financial literacyEarly financial education is crucial. Giphy

Financial experts are increasingly convinced that young adolescents should be included in conversations about money, recognizing that early financial education is essential for navigating today's digital economy. But when’s the right time? Andrew Latham, a certified financial planner with SuperMoney, explains that parents should assess readiness based on specific criteria.

“Parents should consider their child’s ability to handle financial responsibilities, understanding of money management and the overall need for a card. If a child can budget their allowance and has consistent needs to make purchases independently, they may be ready for a card,” he explains.

And which option is better for kids: debit or credit? Well, there are distinct advantages and potential drawbacks associated with both, which parents should consider carefully.

Credit cards

The primary benefit of getting your child a credit card is building a credit history. Credit history length makes up about 15% of your FICO score and up to 20% of your VantageScore. A longer credit history shows that someone has managed their accounts responsibly over time, demonstrating reliable financial behavior. As a result, lenders and credit card companies are more likely to approve applications and offer better terms to those with an established, positive credit history. By adding your child as an authorized user on a credit card with consistent, on-time payments, you can help them build strong credit from an early age.

Child, strong, financial literacy, credit score, money You can help your child build strong credit. Photo by Ben White on Unsplash

“Helping your child build their credit score is an invaluable gift,” writes Jae Bratton for NerdWallet. “A good credit score may help them secure a job, get lower interest rates on loans and, when the time comes, a top-notch credit card of their own.”

However, there are risks. Children under 18 cannot legally have their own credit card; they can only be authorized users on a parent’s account. As the name suggests, authorized users are allowed to use the card, but aren’t responsible for paying the bill. Therefore, parents will ultimately be responsible for all charges made on the card. If your child makes an expensive purchase, it could potentially affect your own credit utilization ratio and even damage their credit score. Jessica Pelletier, Executive Director of FitMoney, a nonprofit that provides free financial literacy curricula for K-12 schools, advises parents to remind their children that “there are firm limits…in place for authorized users.”

Debit cards

On the other hand, debit cards offer a more flexible yet tangible way for children to understand how to manage spending money. For Matt Gromada, the head of youth, family and starter banking at JPMorgan Chase & Co., he believes that early debit card access is a crucial component to lifelong financial literacy.

“Having a debit card opens the door for important conversations and real-world scenarios about the basics of finance—from spending and saving to explaining interest and how it accrues. It also gives your child a sense of pride, independence, and freedom, providing an opportunity for real-life experiences and learning,” he says.

Breaking free, financial literacy, debt, money, money management Break free of financial debt. Giphy

With debit cards, kids are limited to the amount of money available in the account, so they can't overspend beyond what is in the account. There are even modern debit cards specifically designed for kids, such as Greenlight, which offers a range of features that make parents and children feel secure and in control. There is no minimum age requirement for users, and parents can restrict spending at certain stores, set up safety SOS alerts, receive real-time notifications, and turn the card on or off remotely. This is also an easy way to transfer allowances to your child.

According to BECU, a financial cooperative, “a debit card can help your child learn financial responsibility basics such as keeping a card in a safe, dependable location, staying within spending limits, using a card for purchases, checking on balances, and monitoring for fraud.”

Of course, the main drawback of debit cards is that they don’t help establish or build a credit history. So, what’s right for you and your family? Start a dialogue today and discuss the best option for your children.

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Americans' short-sighted focus on 'personal liberty' ended up limiting another type of freedom

As the U.S. crosses the 300,000 COVID-19 deaths milestone, let's take a step back and look at what got us here.

But first, let's tip our hat to those who aren't where we are—to the countries that took swift, decisive action, got the population on the same page about what needed to be done, and kicked pandemic ass. The countries that not only have a tiny fraction of our death toll, but who also have been able to resume normal life in all its glory.

While mandatory quarantines for travelers and contact tracing systems for any cases that slip through the cracks are still in place, countries like Australia, New Zealand, Vietnam, Thailand, and Taiwan are experiencing a level of collective and individual freedom that America—and much of Europe—simply does not have right now. People are attending concerts, plays, sporting events, weddings, etc. without masks or social distancing. People can hug one another without worrying about killing someone. It's literally like a whole other world.

Sure, some of those countries are islands and they all have smaller populations than we do. But the U.S. is bordered by just two countries. Thailand borders four and Vietnam borders three, including China—and our not controlling the coronavirus spread has nothing to do with people crossing our physical borders. And as far as population goes, our large size accounts for raw numbers, but not deaths proportional to population.

Check out the deaths per million statistics among these countries:

Australia: 35

New Zealand: 5

Vietnam: 0.4

Thailand: 0.9

Taiwan: 0.3

United States: 924

We currently have the 12th highest deaths-per-million rate in the world. So much winning, we're sick of winning, right?

It's been said a million times that it didn't have to be this way, and it didn't. But while our government has been blamed for its abysmal response to the pandemic—and while those criticisms are legitimate—that's not the whole problem. It's nice to think that if we had a president that listened to public health officials and provided coherent guidance, we'd be in better shape, and we probably would be to some degree. But a big part of the problem is the American people ourselves.

I love us, but a huge key to controlling a pandemic is getting a population on the same page and getting people to make personal sacrifices for the greater good. It requires a collective commitment, and I'm just not convinced the U.S. is capable of that without a serious rethinking of what our core national value actually means.

The world knows—because we really, really like to shout it from the rooftops—that the U.S. is all about freedom. It's what we were founded on, what we take pride in, and what we cling to as our highest ideal. And we most often define freedom in terms of personal liberty—the right to live our lives the way we choose.

But in a pandemic, personal liberty can be problematic. I know that's hard for some Americans to hear, but it's true. If we all just do whatever we please, we end up right where we are—with an out of control virus killing a 9/11's worth of Americans every day, ten months in, and the ongoing economic hardship that goes along with a half-assed, incohesive attempt to maybe save businesses or maybe save lives. We've ended up with the worst of both worlds—mass death and economic demise—largely due to Americans' insistence upon personal freedom to the deadly and devastating exclusion of everything else.

Let's be clear about the fact that the federal government has not established any mandates or restrictions that violate American freedoms during the pandemic. Decisions about mitigation measures have been left to the states, which is both good and bad. The United States is huge, and logistically it makes more sense for local conditions to guide local responses. However, our borders between counties and states are imaginary lines with no checkpoints or restrictions for travel, which makes for a lot of holes in our collective pandemic control.

I'm not saying that the government should go all willy-nilly with our freedoms; I'm saying that Americans are short-sighted in our vision of what freedom actually means. Too many Americans have exercised their personal liberty in a way that limits our collective freedom (because it leads to out-of-control viral spread) and also ends up limiting personal liberty anyway (because out-of-control viral spread means having to take measures to keep our healthcare system from getting overwhelmed).

I know some people say "collective freedom" isn't a thing, please see the difference between daily life in the U.S. and daily life in Australia right now. Our Aussie friends are living a far freer life than we are, both individually and collectively, because they chose to sacrifice individually so that the whole society could be free from the virus. That's what collective freedom looks like, and they didn't succumb to tyranny to get it. That could have been us, if we stopped seeing everything that isn't "go ahead and do whatever you want" as tyranny.

In a viral pandemic like this one, doing whatever we want is inconducive to true freedom. We're watching this play out in states that were reticent to implement restrictions until now, as hospitals spill over and mandates become necessary for public safety. People exercising their personal freedoms with no regard for public health guidelines results in out-of-control viral spread, which results in social and economic devastation as huge numbers of people get sick and die.

Exercising personal liberty without personal responsibility in a viral pandemic leads to limited freedom for longer, with a lot more pain and suffering, than using our liberty to do what needs to be done to prevent that.

I can already see people bringing up Benjamin Franklin's quote—"Those who would give up essential Liberty, to purchase a little temporary safety, deserve neither liberty nor safety." Some version of it comes up any time the government tries to enact anything Americans view as limiting their freedoms, but there are a couple of problems with bringing it up now. Franklin, as it turns out, was specifically talking about a dispute over taxes to fund securing the frontier, not public health in a pandemic. (And despite what people might assume, his quote was actually pro-taxation.) While that quote pushes all the right "my personal freedom" buttons, I'm quite sure that Ben Franklin would be losing his mind over Americans rejecting public health guidelines in the name of "I do what I want" if he were here today.

As an American, I appreciate our nation's commitment to personal liberty. I really do. But we seem to have forgotten that the founding premise of our republic wasn't just an inalienable right to liberty, but to "life, liberty, and the pursuit of happiness." When exercising personal liberty costs another American their life, then our national values are in conflict. "Give me liberty or give me death" is great when we're not in a viral pandemic, but "Give me liberty and I will give you death" is what we're currently experiencing.

Freedom can't be merely seen as an end, but as a means. In the next pandemic, I hope my fellow Americans will use their personal liberty to choose do what needs to be done to help us reach collective and individual freedom, rather than cutting off our nose to spite our face by insisting on a puerile version of freedom that only leads to all of us losing both.

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These 6 orgs are making sure freedom and justice are for all Americans.

Independence Day is an important day in the United States.

In 1776, the Continental Congress declared the 13 American colonies were no longer a part of the British Empire and would be recognized as a new nation — thus asserting independence from British rule. This action led to the creation of the U.S. Constitution over a decade later.

But for years, the rights our independent nation promised only applied to certain people.

Black Americans, women, immigrants, people with disabilities, and many other communities didn't get to experience the same freedoms. Instead, to varying degrees, they experienced persecution.

With the passage of several Constitutional amendments — such as those that granted black Americans citizenship, women the right to vote, etc. — the U.S. made steps toward equality for all. But, progress is an ongoing journey. While our nation has improved in many ways, black and Latino citizens still experience disproportionate rates of poverty; gun violence has decimated communities of color, schoolrooms, and churches; and LGBTQ citizens still face high rates of discrimination.

Thankfully, Americans are a fighting bunch.Citizens across the country continue to raise their voices for the rights of all Americans. Here are six organizations fighting tirelessly to ensure that rights to freedom and justice truly do apply to all citizens:

1. RAICES

Photo by Joe Raedle/Getty Images. Illustration by Tatiana Cardenas.

RAICES is a nonprofit that provides free and low-cost legal services to immigrants. The Texas-based organization has been doing great work to support immigrants since 1986, and they're now the largest immigration legal services provider in Texas. After a Facebook fundraiser for the organization went viral and amassed more than $13 million, RAICES has been able to increase its ability to help separated families locate one another. Their dedication to reuniting families and ensuring that immigrants are afforded the human rights they deserve serves as a true example of fighting for liberty and justice for all. You can support RAICES here.

2. Color of Change

Photo courtesy of Color of Change. Illustration by Tatiana Cardenas.

Color of Change is one of the largest racial justice organizations in the U.S. Operating online, it strives to make the government and large corporations more knowledgeable about how to create safe and equitable environments for black Americans. Striving to ensure black Americans enjoy the same freedoms afforded to them by the Constitution, the organization continues to successfully fight for economic, criminal, and media justice as well as be an amplified power and voice for people of color. You can support Color of Change here.

3. Easterseals

Photo courtesy of Easterseals. Illustration by Tatiana Cardenas.

Americans living with disabilities have made huge strides thanks to organizations like Easterseals leading the way. Easterseals works to provide support to citizens with various disabilities. Their work contributes to a growing mission to ensure that all Americans enjoy accessible spaces and the same freedoms and respect. You can support Easterseals here.

4. Planned Parenthood

Photo by Alex Wong/Getty Images. Illustration by Tatiana Cardenas.

Planned Parenthood provides comprehensive health services, such as mammograms, birth control, and reproductive and sexual health care, to millions of women around the world. Recently, the organization has been under increased attack from the far right and Christian extremists. In spite of threats from the current administration to decrease funding and growing discrimination, citizens and celebrities have banded together to keep the vital organization flourishing and able to provide health care and services. You can support Planned Parenthood here.

5. Lambda Legal

Photo courtesy of Lambda Legal. Illustration by Tatiana Cardenas.

LGBTQ Americans certainly weren't mentioned in text when the Founding Fathers were imagining what a free nation for all would look like. Lambda Legal has spent years fighting for equal rights and safer environments for LGBTQ people and queer expression. But, in light of recent rollbacks to policy in place to protect queer citizens, that work is really just beginning.

Lambda Legal communications director Jonathan Adams writes, "We have seen in their continued attacks on heath care an issue of grave concern to millions of Americans today. We the people — all of us — must stand together at this time to protect our shared rights and freedoms." Adams highlights how the current administration is "actively working to divide us by attacking children, immigrants, people of color, trans and queer individuals, Muslims, and other groups they seek to marginalize. Their continued focus on polarizing us is taking a toll on the fundamentals of this great nation, those being life, liberty, and the pursuit of happiness."

Lambda Legal's efforts to fight for queer citizens is more important than ever, and it is near the truth of our county's declared ideology. You can support Lambda Legal here.

6. Everytown for Gun Safety

Photo courtesy of Everytown for Gun Safety. Illustration by Tatiana Cardenas.

Founded in 2014, Everytown for Gun Safety combined two orgs — Mayors Against Illegal Guns and Moms Demand Action for Gun Sense in America — with a shared goal for comprehensive gun safety laws. "In order for all Americans to feel and be free, it's imperative that we feel safe to be who we are in our communities — whether that's in a place of worship, at a concert or at school or a college campus," wrote Shannon Watts, founder of Moms Demand Action.

Watts continued, "We must do everything in our power  to make our communities safer and that means doing more to protect marginalized communities from gun violence. ... The fight for gun violence prevention is also a fight for equality." You can support Everytown for Gun Safety here.

The promise of America — that freedom and justice exists for all — is a beautiful example of how democracy should work. But that promise can become meaningless if we fail to ensure that those freedoms extend to everyone for a safe and equitable society. These six organizations — and many more — are doing the work to make sure that the sentiments our country was founded on extend to all citizens.

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9 things all Americans can agree on in 2017.

Before 2017 follows too closely in the footsteps of 2016 as yet another year of divisiveness, filled with Twitter wars and men on TV yelling about "hateful this" and "PC culture that," let's take stock of some things we can all agree on.

An accurate visualization of America right now. Photo via iStock.

From the special-est snowflake liberals to the don't tread on me-est conservatives, these are a bunch of plain and simple agreements that most, if not all, Americans can come to. We're probably not going to hug and sing "Kumbaya" after this, but maybe we can tear down a little bit of that wall that's dividing us. (Then part of it can be a fence!) (See, we're already laughing together.)

Things like...

1. Freedom is good.

That's right: freedom. You love it, I love it. People have fought and died for it. Alexander Hamilton and Beyoncé have both written hip-hop songs about it.

Some people who love freedom.  Photo by Justin Setterfield/Getty Images.

Freedom is the reason you can leave a nasty comment on this article (I can't wait, by the way) and it's the reason I walk past two mosques and a Catholic school every time I go to my local Jewish deli here in New York City (true story).

Freedom makes this country an eclectic and exciting place to live, and none of us want it to go anywhere.

2. "Batman v Superman" sucked, but the director's cut made it suck less.

Yeah, lets talk about that. "Batman v Superman: Dawn of Justice" was a hot mess. The tone, the pacing, the story, it was all completely off. Lex Luther's plan made no sense, and he was acting all weird the whole time. Just terrible.

They all know it, too. Photo by Bryan Bedder/Getty Images for Bai Superteas.

Thing is, Zack Snyder's nearly three-hour director's cut was way better. Not "great," not even "good" really, but thoroughly watchable. It was, at the very least, an original take on the characters instead of a cookie-cutter action movie with no personality, right?

Boom, look at that. You. Me. Same page.

3. Going to the doctor shouldn't cost like a crap ton of money.

Hang on! No, this isn't me using a young, hip platform to shoehorn in an advertisement for the Affordable Care Act. (Who do you think I am, President Obama? Zing!) (See? We can do this.)

Photo by Pete Marovich-Pool/Getty Images.

I'm just saying: No one should have to go to the doctor and be horrified at the bill. Did you know that nearly half of American households are one emergency away from entering poverty? Imagine if you had to worry about your health while simultaneously worrying about being able to put food on the table. That's a position no one should have to be in.

Whatever becomes of health care in the future, let's agree to agree: No one wants to (or should) go into massive debt because of a health crisis.

4. Billy Joel.

Photo by Brad Barket/Getty Images.

I mean, right? Come on. Piano Man? He's great.

5. We need more jobs.

Jobs are good! Unemployment is bad. More jobs means a stronger economy, more opportunity, and more money for you and yours. Who doesn't want that?

Photo by Matt Cardy/Getty Images.

I'll go you one further! We need more American jobs. We need jobs to be created right here in the homeland, making American stuff and building American industries that we can pass down to future generations.

The fact that we've steadily added jobs over the last eight years is great, but it's not enough. Now, we may disagree on what those new jobs should be and how best to create them, but at our core we're all chanting the same mantra: Mo' jobs, fewer problems.

6. This is a weird picture.

Photo by Philippe Huguen/AFP/Getty Images.

What are these people doing? Why does that one guy have an umbrella? Did they survive a pink kayak disaster or is this some kind of ritual sea-bath in Northern France? The world may never know, but you and I and the rest of America can rest assured that we agree — there are no two ways about it — this is a bizarre picture.

7. People should be able to afford their educations, regardless of income.

More people being able to pursue their education beyond high school is pretty much always a good idea. It helps us foster innovation and create those jobs and opportunities we were just agreeing on a few minutes ago.

Photo by Joshua Lott/Getty Images.

The massive student debt crisis is hurting all of us. Millions of young people are spending the best years of their lives buried under mountains of loan debt while trying and failing to get one of those jobs that there aren't enough of. Pursuing education should give people more opportunities, not hold them back, and, in turn, hold the whole country back.

That's just not cool.

8.  Brendan Fraser is the only actor who should star in "The Mummy."

Can't faze the Frase! Alberto E. Rodriguez/Getty Images.

We're all thinking it. What's Tom Cruise doing in that new "Mummy" movie? Does the world need more Tom Cruise? Does Tom Cruise really need another franchise? Are movie-goers really that thirsty for more Tom-Cruise-runs-away-from-things summer blockbusters?

Get Fraser back in there! This is his fight.

And finally...

9. Too many toddlers are shooting people.

Yep, this is a thing that is happening.

In 2015, there were 58 shootings committed by toddlers. Which is too many by about 58. There were over 50 in 2016 as well. Here's a chart from the Washington Post with a terrifying title:

So yeah, we can probably agree that we should do something to keep guns out of toddlers' hands. I know this is a divisive issue. I don't expect us all to suddenly agree on the need for more gun control laws (although most people agree on that too) because we all saw what happened after Sandy Hook and after the Pulse shooting. (You know — nothing.) I'm not talking about taking anyone's guns away, either. I'm talking about agreeing that we should all practice enough personal gun safety to protect ourselves from toddlers with guns.

Many of the stories in that Washington Post report involve gun owners who weren't practicing proper gun safety protocol. If we can't agree on more gun control laws and regulations, I'm pretty sure we can all come together and agree that anyone who has a gun should be keeping it far away from where any kid could reach it.

Making 2017 a year with substantially less toddler-shootings shouldn't be too controversial, right?

Honestly, the list doesn't end there. It's on all of us to keep it going.

There's a lot more that we can agree on. Pie, Nutella, campfires, funny hats. The list of things that unite us has always been longer than the list of things that divide us. That's good to keep in mind.

So yes, we're probably going to keep yelling at each other in 2017. We're going to openly disagree, debate, stumble, and evolve, and we should be truly thankful to live in a place where we have the freedom to do so.

In a world of Twitter, talking heads, and fake news, it's too easy for us to lose our common ground and lose sight of our shared humanity. We forget that we all love this beautiful, messy country of ours and want it to be better, and that we want to make it better through hard work and good ideas*.

*If you consider "good ideas" ones that strip away the rights of already marginalized groups, please see above: "Freedom is good."

OK now. Back to it.

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