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Is Your Teenager Ready For A Credit Card? 1. Start With A Checking Account Monitor how your teen manages a checking account. If they have overdrawn the balance or ignored the account, they are not ready for a credit card. When teens put money in and make purchases regularly, it’s a good indicaon of engagement with their finances. 2. Teach How A Credit Card Works When starng out, most teenagers think credit cards are free money and that they only need to make the minimum monthly payment to maintain a decent credit score which isn’t true. To help teens under- stand how credit works, the next me they ask you for money, make it a loan. Explain that you’ll charge monthly interest, they don’t have to pay it back right away but the sooner they do the less they will pay. When they do pay it off, they’ll build trust with you, and more trust may equal more loans in the future. If you have teens who won’t play along, they are not ready to get involved with real-world credit. Connue teaching them the importance of mely payments, what a credit score is and how to have a good one, lines of credit, APR and credit card fees. 3. Demand Honesty When teens are dishonest about spending, it should be a huge red flag for parents. If your child is spending their lunch money (or any money) on something else and trying to hide it or “borrowing” money from your wallet without asking, they are not able to control their own money and need more guidance before applying for a credit card. *,**An introductory Annual Percentage Rate (APR) of 0% as of 7/1/2020 will apply to purchases and balance transfers made through the first fifteen billing cycles of your account. After that, the variable APR will be 8.15% - 21.00%. This APR will vary with the market based on Wall Street Prime & credit worthiness. For more details about rates, fees, and other important cost information, a card application, Disclosure and Agreements, or to apply online, please visit www.westerlyccu.com. Offer may change at any time. Restrictions may apply. Insured by NCUA. Article adapted from Is Your Teenager Ready For A Credit Card 3.11.20 Sarah Cunnane, MoneyWise. 4. Set Payment Deadlines One of the most important credit card rules is making monthly pay- ments on me. Failure to do so leads to late payment penales, card cancellaon and negavely effects your credit report for at least 7 years. Before your teen gets a credit card, make sure they can meet deadlines. Get them into the habit of pung deadlines, payment due dates, and appointments into their phones and seng an alerts. 5. Find a Good Starter Card Parents have the opon to provide their teen with a credit card that can help them pracce using credit with lile or no risk. All applicants under 21 need proof of income. If a teen (ages 18+) doesn’t have veri- fiable income, he or she needs to have a parent or guardian co-sign. Does your teen have an income, but you want to co-sign anyway? That is ok too! Geng your teens started this way will allow you to monitor and coach them through their first purchases, payments, and ensure that they develop good habits. WCCU’s Low Rate or Rewards Credit Cards are great starter cards. They both offer No Annual Fee* and 0.00% APR* for new cardhold- ers on purchases and balance transfers for the first fiſteen months. Another opon is have your child start out with a secured credit card. WCCU’s Secured Credit Card requires a deposit at account opening. Spending with the card cannot exceed the inial deposit, and if a bill goes unpaid for 60 days, WCCU takes the money out of the inial deposit and closes the account. When a teen uses the secured card responsibly for a period of me, he or she will be given the chance to graduate to WCCU’s Low Rate or Rewards Credit Card. Quesons about which card is best? We are here to help! Feel free to checkout our website or call us today for more details. WCCU’s Low Rate and Rewards VISA® Credit Cards are great starter cards. They both offer No Annual Fee* and 0.00% Intro APR** for new cardholders on purchases and balance transfers for the first fiſteen months. Aſter that, the variable APR will be 8.15% - 21.00%.** News Community July 2020 Issue As a parent, you have the crucial task of geng your kids up to speed on life skills, personal finance, and readying them for success. The thought of giving your teen a credit card may make you nervous. While building and maintaining a good credit score opens doors to a first car loan and eventually home ownership, a history of bad credit can shut them just as fast. Follow these ps to see if your teen is ready!
