Study Shows 1 in 6 Preteens Has a Credit Card
According to the 2019 Parents, Kids & Money Survey from T. Rowe Price, 17% of children ages 8 to 14 now have a credit card. This is significantly up from the 2012 study, when only 4% of preteens had a credit card.
These statistics represent children who are authorized users for their parents’ credit cards. Parents remain the primary users and are ultimately held responsible for the charges to the card. Children can build their credit portfolio before turning 18 if they are connected to a positive credit card account.
In the survey, parents were asked which type of financial accounts their children had. Fifty-four percent of children had a savings account, and 52% had a piggy bank; 19% had a checking account, and 10% were linked to an investment account. Only 7% of parents said their children did not have any financial accounts.
Parents were asked how they would describe their children’s financial habits. Fifty-eight percent said their child was a saver, while 42% said their child was a spender. When asked to describe themselves, 65% of kids said they were savers. Children were also asked to describe their parents, and 80% said their parents were savers.
With regards to paying off credit card bills, 59% of parents said they handle that part of the process. The remaining 41% had their children pay the bill.
One of the biggest benefits of having a child as an authorized credit card user is the ability to teach him or her about financial literacy. As a parent, it is important to review transactions with your child and have him or her involved with the payment process. This will make the transition to credit cards easier when the child turns 18.