Active discussions

Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Talk
Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Original poster

(When) should we encourage DD to get a credit card?

72 replies

TeenTimesTwo · 13/06/2019 14:49

DD1, 19, lives with us rent free, and is OK with money, managing her pay well, saving for yearly bills such as car insurance.

We are wondering when / whether we should encourage her to get a credit card. This would not be for the credit (we would expect her to set up a direct debit to pay it off in full each month), but more to build up a credit rating, and also for the guarantee it helps give when purchasing things online.

The big risk of course is she spends too much. But is that better learned when with us than once she's moved out?

Any opinions / advice?

OP posts:
Teachermaths · 13/06/2019 15:35

What about a sim only contract? They are usually better value than PAYG.

Mobile contract is a basic of credit rating and easy to get.

username99382727 · 13/06/2019 15:36

I got a credit card at 18 OP again with the same idea as you to build my credit score. I have always been reasonably good with money and sensible. As long as you trust your daughter and maybe see if the credit limit can be quite low I don't see an issue.

crustycrab · 13/06/2019 15:53

Another here who never had a credit card before a mortgage. No problems at all

HJWT · 13/06/2019 16:14

@TeenTimesTwo tell her to get a Sim only contract its usually for 12 months and you can get a good deal for £20 a month.

Also nothing wrong with a credit card, she could put her fuel on it through the month or travel expenses and then pay it of at the end of the month either with her wages or with putting aside the money she already had allocated for these things.

I put my food shop and fuel on the credit card and then pay it before the end of the month, its good to build up your credit score. I totally forgot about a bill I had for £18 till they sent me a reminder paid it the same day but my score had already gone down 5 points!!

Mbear · 13/06/2019 16:19

I also think a credit card is a good idea for online purchasing as well. My theory is if there is a problem and something dodgy happens and a bill is run up fraudulently, I can argue with the CC company, if it’s my debit card and my bank account is emptied, I can’t pay bills until the bank sorts it.

Mrsjayy · 13/06/2019 16:23

Setting up a contract phone will give her a credit rating that is whatmy children did when they were 18/19 she doesn't imo need a credit card,

justanswerthephone · 13/06/2019 16:27

What I don't like about contract phones is the fact you are tied in, so if she e.g. was made redundant, she'd be liable for ongoing payments.

Well it doesn't have to be a huge amount and is much lower risk than a credit card which she could quite easily run up a huge bill with.

She is living rent free; if she gets made redundant a mobile phone contract will have a pretty low impact.

LoafofSellotape · 13/06/2019 16:31

I would never encourage anyone to get a credit card either. very bad move
Why?Confused
CC's should be used buying big purchases and for travel and tobuild your credit score up. I will absolutely be encouraging Ds to get one and pay it off monthly.

LoafofSellotape · 13/06/2019 16:34

I also think a credit card is a good idea for online purchasing as well. My theory is if there is a problem and something dodgy happens and a bill is run up fraudulently, I can argue with the CC company, if it’s my debit card and my bank account is emptied, I can’t pay bills until the bank sorts it
After buying a Miele dishwasher which was £700 and the company then going bust I was VERY pleased I'd bought on a CC as was protected and got my money back!

HoneyWheeler · 13/06/2019 16:34

My parents were terrible with money but I've always been fascinated by it. One of the things I read was Women and Money by Suze Orman - her advice is geared towards the US but the fundamentals were appropriate for my situation too.

I think a credit card is totally fine, as long as your daughter understands the process, what compound interest is, and how to choose a card. Eg if she is likely to pay it off in full each month, then you want a card with no annual fee but maybe a slightly higher interest rate. But if she may carry a balance she might be better off with a lower rate.

When I got my first card I called and lowered the rate to £500, which gave me peace of mind. I think it's a valuable thing to have, particularly for the protection of you order things such as furniture

Youngandfree · 13/06/2019 16:35

CC's should be used buying big purchases and for travel and tobuild your credit score up

They CAN be used....it doesn’t mean they SHOULD be used, purchasing in cash and keeping the receipts is fine too. If you can’t pay a holiday in cash, then should you really be going?? Not needed to build a credit score at all.

justanswerthephone · 13/06/2019 16:39

young

Credit cards offer an extra layer of protection. That's why it's often advised to use them to make large purchases.

Youngandfree · 13/06/2019 16:41

@justanswerthephone PayPal is just as safe these days. I guess it has its plus sides but as I have said I have never had one, and I have managed just fine 🤷‍♀️

justanswerthephone · 13/06/2019 16:47

PayPal is just as safe these days

PayPal? To pay for your holiday?

Erm ok.

LoafofSellotape · 13/06/2019 16:48

If you can’t pay a holiday in cash, then should you really be going?? I didn't make myself clear, they should be used to pay for travel as most cards offer lots of extra protection not paying for a holiday you can't afford. I have always paid the balance at the end of each month.

Barnabyboy · 13/06/2019 17:04

If you pay for large purchases using a debit card and not a credit card, you’re an idiot

Youngandfree · 13/06/2019 17:04

@justanswerthephone I didn’t mean for holidays 🙄 I usually pay those on a debit card.

dementedpixie · 13/06/2019 17:07

If you pay even part of a holiday you are covered for the full amount under the consumer credit act which can help if there are problems with it. Same with other large purchases. Debit cards do not offer the same protection

Hecateh · 13/06/2019 17:23

I got a credit card at 18. Initially I only used it for petrol and paid it off each month. I then started to put the weekly shop on it, continuing to pay it off every month. I now put at a guess 99% of my spending on it. I carry a very small amount of cash and use my card for everything else. I still pay it off every month.

I have never paid a penny interest in the 46 years I have had it.

I've got a great credit rating - I don't need it BUT it's great to know it's there.

SilentSister · 13/06/2019 17:23

I positively encouraged my DD to get one when she still living with us, but she didn't feel comfortable doing so. She had a bank account, debit card and various savings, and didn't really need it tbh.

However, now she is 21, living in London independently, earning a good wage, having to buy more expensive items, she sees the benefit of getting one. She will be getting a cash back one with extra benefits, and use it for her food shopping too.

I have had a credit card from 18, when I worked full time. I have never not paid off the entire balance. I actually haven't used cash for ages, and use my debit card for all small purchases. My credit card is effectively used for everything over £20. All petrol, food, shopping, holidays, any large purchase. I get back about £200 a year as well. I couldn't do without mine. My PayPal account is linked to my credit card too, double protection!

justanswerthephone · 13/06/2019 17:27

I didn’t mean for holidays 🙄 I usually pay those on a debit card.

That's odd, since it was holidays that you mentioned, so take your eye roll and ram it 🙄

Teachermaths · 13/06/2019 17:29

Paying for holidays on a debit card is crazy. Use a credit card and you are better protected should anything go wrong.

Youngandfree · 13/06/2019 17:40

The PayPal was a suggestion for big purchases, I then said cash for holidays as otherwise I wouldn’t be going.

AwkwardPaws27 · 13/06/2019 17:44

Get a 0% card. Put the annual car insurance (or another annual bill on it). Put the card away (or in the freezer!). Pay bill off monthly.

Saying that, I was terrified of credit and only got a card two years ago, but built up a good rating before thay. I did have utility bills etc in my name from the age of 18 though (no option to live at home).

Swipe left for the next trending thread