Credit Cards and Grandchildren...Lessons Learned?

As Grandboomers, we all want to do what we can to make our grandchildren happy. Shopping in the mall, a day at the amusement park, a sporting event, buying them something special. It's great to be able to provide these extras and see them so happy.

And, how do you pay for them? For many, you simply do what you always do. You pull out a credit card. It's automatic. You know that next month an invoice is going to show up and it's time to pay real money for your purchases. However, does a small child have the same perception? When they get home, do they realize "cash" you worked to earn has been spent or do they think that a credit card is a magical piece of plastic that brings all good things without any subsequent responsibility?

Take your grandchild to the mall, and you can spend (literally) the entire day without taking cash out of your pocket. Clothing, toys, lunch, parking, you name it, it can all go on plastic. According to TIME magazine, the average credit card balance is $7,200. That seems high and frightening to this Grandboomer who prefers to pay balances in full each month. But we'll accept it so we can continue with the point. The article goes on to say that if you pay only the minimum due each month at 18% interest (the national average), it will take you 52 years and an additional $20,531 to pay off your debt...if you have no additional charges.

The young mind may think "I want one of those cards because you just put it down and it's good for anything you want." Is this the lesson you want to provide your grandchildren? Better that they should learn the responsibilities of using a credit card now; before they're over their heads in debt at an early age. When you use your credit card, tell them what is happening. Tell them this is a substitute for cash and that you will receive a bill for all your purchases at a later date, that must then be paid. Point out that a credit card is a convenience that must be used responsibly.

Remember, part of being the best Grandboomer you can be is to share your knowledge and life experiences with your grandchildren. Clear guidance now will help them have better lives in the future.