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One parenting lesson that’s easy to overlook—but just as valuable as the rest—is the importance of credit.

Parents can influence kids’ relationships with money and credit from an early age. Teaching your child about what credit is, how to use it wisely and how to make the most of it can help set your child up for success later in life.

Wondering where to start the conversation? Here are a few key lessons about credit to pass down to your kids.

1. Credit is borrowed money that you have to pay back.

Plenty of kids see their parents hand over a credit card in the checkout line, but not every child understands what credit is or how it works.

You can explain to kids from a young age that credit is not free money; the conversation can become more detailed as kids get older. Explain to kids that credit is a loan that you must pay back, and talk about what happens if you don’t pay it back on time, which includes owing fees and interest.

2. Credit comes with a lot of responsibility.

Credit makes it easy to buy just about anything we want—including things we can’t really afford. Help kids understand that misusing credit can be a costly mistake as fees and interest add up. Explain that using a credit card requires a significant amount of impulse control to make sure you’re only borrowing what you can pay back.

3. Using credit wisely can pay off in the future.

Some kids (and even adults) learn to fear credit cards, but the truth about credit isn’t all doom and gloom.

Talk to your kids about the benefits of credit, including the importance of establishing a credit history. Credit history is one of many factors that goes into determining a person’s credit score. Explain how a strong credit score can help kids later in life if they ever hope to rent an apartment, buy a car, take out a loan or purchase a home. Older teens may also want to consider opening a low-limit credit card, like our Visa College Real Rewards Card, to begin building their own credit history early.

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