I am about to help my child start building their credit with a credit card and a car loan – is this right or wrong?

If your child does not have solid financial health, this could lead to disaster.

However, if you have talked extensively with your child and they have a good understanding and knowledge of money, credit and debt, this might be a great idea.

We suggest starting with a secure credit card. This will allow your child to understand that the credit card is their money, not someone else’s money. This also prevents over-charging and spending getting out of hand.

We also suggest starting small when it comes to a vehicle. A brand new car carrying a loan of $30,000 isn’t advised. However, a used car of $5,000 or $6,000 will keep a monthly payment down and even lower terms.

By using these two options for your child, you can help keep their costs low and reduce your risk as much as possible.

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