An expert explains how to teach your teens to build good credit

JACKSONVILLE, Florida – Let’s face it: the idea of ​​giving a credit card to an 18-year-old can be scary. But there are safe ways to build credit for your teenager without racking up a mountain of debt.

Mary Svoboda, interim president of Jax Federal Credit Union, said the biggest mistake most parents make when it comes to their children’s credit is not telling them about it early enough. She suggests having these conversations early – before it’s time for them to buy their first home.

There are a number of avenues that parents can take to educate teens about the importance of having a good credit score and avoid the pitfalls that can lead to bad credit.

“I think it’s about focusing on the future,” Svoboda said. “” There will come a time when you want to rent an apartment and I want you to, so let’s get started now. “

Before you explore the best ways to build credit from scratch, here’s a free tip from financial advisor Michael Wolf: Don’t buy things you can’t afford.

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Okay, now that we’ve got that part sorted out, how can a young person safely accumulate credit?

Svoboda recommends getting what is called a secure credit card. Like a debit card, it will only allow its holder to spend the money that is in their account. But unlike a debit card, they can still accumulate credit with it.

She suggests starting with a card from a credit union instead of a store or bank.

“Credit unions are not for profit,” said Svoboda, who admitted she was a bit biased on this. “We try not to have products with pitfalls and hidden costs and things like that.”

Before getting a credit card, Svoboda says it’s important to consider whether you plan to pay off the balance each month. If the answer is yes, interest rates matter less. Otherwise, they do.

“These rates and fees can get out of hand if you’re not really careful, so what you want to be is a smart shopper,” Svoboda said.

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Remember, having good credit is easy – however, fixing bad credit is the hardest part.

Copyright 2020 by WJXT News4Jax – All rights reserved.

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