Credit Card thread gave me an idea for Ashley

MommyToAshley wrote: Ashley gets an allowance -- out of that allowance she must save some, donate some, and she has some to spend. We have stopped buying her little things here and there... if she wants it, she must buy it with her own money. She may ask for something in the store, and I will say, "sure, if you have enough money". She'll think about how much she has, how much it is, and figure out how much she would have left. She usually ends up saying, "well, maybe I don't want that right now" I think it has been an eye opener for her.

However, she still doesn't get what a credit card is... sometimes she will say, "well, just put it on credit card". So, here's my idea:
If she wants to buy something when we are out and she doesn't have her money, I will let her use a credit card (maybe I will make one out of cardboard) and keep the balance on there. And, then when it is time to get her allowance, she will have to pay her credit card debt first. I think it will also be a real eye opener and maybe she won't have to learn the lesson when she gets older.

PrairieMom replied: just make sure to charge her 20% interest, and jack it up if she doesn't pay on time.

MommyToAshley replied:

my2monkeyboys replied: That's a very good idea! I may have to steal it if you don't mind!

msoulz replied: I think it's better to say if you can't afford it you don't need it. I think that would be a better lesson. JMHO.

A&A'smommy replied: hmmmm yeah that might be a good idea

MommyToAshley replied:
I think she gets that concept now, especially since she had to pay for it with her own allowance. I am just trying to get her to understand that when you use a credit card, you still have to pay money... it's not magic.

coasterqueen replied:
We've been doing what you mentioned in your first para since she was 5. We actually started doing it with Megan some as well - Megan won't get an allowance until age 5, but we make her use her birthday money, etc that way.

I like the credit card, idea. Kylie has said the sames things as Ashley before too, but she also complains that we only use cards and not cash. She hates when she wants a soda or a gumball while we are out and we don't have cash on us. But were talking about our checking account debit card we use.

msoulz replied:
I see - yes, that does make a lot of sense. I wonder if they think a bank is a magical place that just hands you money too! I remember having to explain to my son that I gave the ATM the money before I asked for it back!

boyohboyohboy replied:
I see what you mean about Ashley thinking that the money just appears in the ATM. but we have stuck by the idea that mary expressed. I left my parents and got into real credit card debt, I mean really bad..but I worked and got myself out of it, but it took a lot of work and sacrifice.
I wouldnt wish that on anyone.
I hope my kids never use credit cards.

msoulz replied:
I had a credit card starting at 18 in college - it had a $500 limit. I only used it if I had to. The first time I really used it was when I graduated and needed new clothes for my job (I think I Had a $!000 limit then) and I paid that off within 2 months and I have only carried a balance one time for one month since then. This is what my dad taught me and he is the one who co-signed for my card so I knew better than to screw up!

I guess my point is that sharing your experience will educate your kids to use credit wisely. I think it is a good idea to have a credit card for emergencies and/or if you just don't feel comfortable carrying cash. And it proper use does establish credit for those later puchases of cars and houses which most of us finance.

The cards are not inherently evil, they can be very good tools.

cameragirl21 replied: I have say that I use my credit cards for everything, EVERYTHING...I only carry cash to go the farmers' market because they don't take plastic and to pay for parking at the beach since I've been going quite often lately.
BUT, I pay them off in full every month and never buy anything I can't afford right now. The thing is, Discover and Chase pay me back up to 3% for purchases so I actually make money using them...I get about $600 every year from Discover in free money and it costs me nothing to use the card...I have never paid interest on a credit card.
I think plastic is great if you use it wisely as every month I can see a breakdown of what I spent and can see my spending patterns also.
I think it's a great lesson for a child, personally, because I am one of the only people I know who doesn't carry tons of credit card debt.

msoulz replied:
We operate the same way Jennifer. I keep hearing that the credit card companies are going to cut off folks like us because we don't pay them interest but then they make a % of every transaction so they have nothing to complain about.

cameragirl21 replied:
I hear the same thing about them cutting us off and ITA that they make enough money off of us as it is.
I seriously don't know what I'd do without my plastic.

cameragirl21 replied: I should also add that when I get cash to go to the beach or go to the market, you know where I get it? From my Discover card...some stores offer cash back when you use your Discover card and that is precisely what I do.
I'd be lost without it.

mckayleesmom replied: You can get her one of those Visa cash cards and put a certain limit on it and tell her she has to put the money back on it at the end of the week.

jcc64 replied:

And also tack on an additional 10% every time she forgets to take the garbage out or brush her teeth.

luvmykids replied:
ROFL My kids still think the bank is just a brick building with lots of generous folks inside! When I tell them we don't have the money for something their answer is ALWAYS "Just go to the bank!"