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It cansave you moneyand make it easier when it comes time to make big purchases like homes and cars.
At the same time, it can be difficult to establish credit and keep a good credit score.
This is especially true when someone is just starting out as a young adult.
This will help them understand how credit accounts and credit cards work.
Be sure that you and your kid understand this is not a joint account.
You are the primary account holder responsible for all the transactions.
That means if your kid misuses the card, youre the one at fault.
Some other benefits include financial education opportunities for your kid.
you’re free to show them how to responsibly pay off debts and manage credit cards.
Think About Certain Factors
Lets look at some factors to keep in mind.
You also may want to only do this strategy with older kids.
It might work best if your kid is in their later teenage years or early 20s.
You should also consider adding rules and boundaries.
You could let your kid know that youre going to do this for one, two or three years.
you might set spending limits for them as an authorized user.
In fact, you dont even need to give them a card at all.
The credit benefits can still translate.
The lessons they learn about money and credit could stay with them for a lifetime.
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