Five tips to help your kids manage their money at school

Fours students in hallway of school

Sending your children off to college comes with its own set of challenges, but have you considered credit card literacy to be one of them? After all, as parents, you know the importance of managing good credit, but your kids may not be as financially savvy.

Here are some tips to make sure your child’s experience with credit is smooth sailing, all the way from the first day of school to the last.

  1. Start with a clean slate. Once your child is old enough to have their own credit card, it may be best for them to first check their own credit bureau report to confirm there is no fraudulent or incorrect information on their file and ensure they are starting off their credit history with a clean slate. Visit the websites for Equifax Canada and TransUnion Canada to find out how to obtain a free credit report from each credit bureau.
  2. Make sure they open a bank account. Having a chequing and/or savings account and keeping them in good standing can be an important part of your children developing financial literacy. They should be made aware that certain negative activity like writing a cheque without the funds to cover it may end up reflected in their credit bureau report.
  3. Review credit card options. Credit cards are not one size fits all. It’s important to find a credit card that suits your child’s lifestyle and spending habits. A good start is applying for a no-annual-fee credit card with a loyalty rewards program, such as the PC Financial Mastercard. This card lets them earn PC Optimum points on every purchase. Students are already strapped for cash as it is, so not having the burden of an annual fee on their credit card makes life that much easier and earning points that can be redeemed towards free groceries is always a bonus.
  4. Pay bills on time. Knowing how interest works and how to avoid paying it is a staple when it comes to credit card do’s and don’ts. No one likes having to pay extra when they don’t need to, so making sure your child is well versed in paying off credit card bills on time is a must.
  5. Get and keep a steady job. That student job never looked so good. Employment history is one of the most important factors that financial institutions look at when determining whether to lend you money, like through a credit card. Having a part-time job throughout the school year or during the summers is a great start.

Source – www.newscanada.com