Credit Cards in Kindergarten?

I routinely receive dozens of credit card applications in the mail. Recently, one read: "Dear Miss Sophia Kensley: Since you are a valued customer...." I'm still not sure how my 6-year-old was selected for the offer.

"What would you do with a credit card if you had one?" I asked her.

"I don't know. Play with it, probably," Sophia mused.

Indeed, I said, that's what many adults do. After all, these handy pieces of plastic fit in a pocket and can be used to buy just about anything, including things we can't afford and rarely use. But could they perhaps serve as valuable learning tools for personal finance management? Do kids need credit cards?

According to USdebtclock. org, our national debt is currently more than $15.5 trillion, which equates to about $50,000 per citizen. The responsibility of paying it down sits squarely on the shoulders of Sophia and her 8-year-old sister, Ella, their schoolmates, and, at this rate, their children and grandchildren. Given this burden, it's my job as a parent to prepare them for a lifetime of fiscal responsibility.

A friend of mine who works in the financial industry has suggested to me that living within one's means is one of the most important things for parents to teach their children. In other words, don't spend what you don't have. For every $100 earned, he recommends saving $10 and leaving the rest available for spending. That way, there will always be something around later, whether in tough times, retirement or to make a substantial purchase. But planning for the future is not organic; it must be taught.

Most financial transactions now take place electronically, making credit and debit cards vital. This is convenient but it deprives youngsters of an appreciation for the value of money. Spending $50 for dinner looks identical to booking an all-inclusive vacation or buying a candy bar. Children need a way to learn the basics of economics.

Tanya and I help our daughters count the coins in their piggy banks. We require them to save large portions of birthday and holiday money. They are free to use their “spending money” on whatever they choose, on the condition they have to live with their purchase. But there are still the issues of credit, debt and interest, which I don’t expect my elementary school-age children to grasp. Heretical as it sounds, credit cards may be the solution.

Teenagers with income can apply for and obtain credit cards, with parents as cosigners and with low spending limits. If they pay their bill in full every month, thereby avoiding the dreaded finance charge, they keep the card and build a high credit rating. This could help in time with paying for a home or higher education, what my friend calls “good debt.” And most importantly, they develop responsible habits and skills that will help them throughout their lives.

Don’t worry, I didn’t fill out that Visa application for my kindergartner. But rest assured, I’m keeping it handy.