Credit card lesson for kids

[JoGibson]

I came up with this idea as a homeschool lesson/project for my kids and shared it with one of my groups.  They kept telling me to make it a journal post to share with all you moms.  So here it is.

The kids have become aware of the magic credit cards they see people use all of the time.  Jason and I dont have any (we are so proud of that) but grandma and grandpa take them out for everything.  What the kids dont realize is that grandpa pays off the card weekly so they dont get interest charges.

Well now the kids have their own credit card from the bank of mommy and daddy.  Its an index card with the rules written on one side with their signature on it and on the other side is their balance.  They have a $20 credit limit.  They are charged interest on whatever the balance is friday morning and if they go over the limit there is a fee.  There is also a late charge if they do not make a payment every friday.  As predicted both used that card at the store today so let the lesson on how much credit cards suck begin. Both earn allowance so if they apply it right they should not have an issue .......... if they dont, ouch. 

Before you ladies yell at me about stealing their allowance through interest I want to include all interest charged to them goes right to their college savings accounts.  This way at the end of this lesson (when they finally pay it off in full) I can show them how much they paid in interest and what would happen if they placed that money in a savings account vs wasting it on credit card interest.

[mouse1085]

Apr. 9, 2010 at 2:30 PM

awesome idea, keep us updated on the Friday payment due date and how it all fairs out!! I'm super interested.

[ame4c]

Jan. 8, 2011 at 10:25 AM

I think it's a good lesson, but I personally would not even teach them this.  They need to know the evils of credit cards, not that it is o.k. to use them even if you pay them off.  Credit cards are bad even if you pay off the balance as their grandparents do.  The best money lesson kids can get is with this:

http://www.amazon.com/Financial-Peace-Jr-Tomorrows-Millionaires/dp/0963571222

If you have not taken the Financial Peace Class I would highly recommend the adult class for you and your husband.  It will open your eyes.  You guys are on the right track not having credit cards.