Parenting & Family

Best way to provide your kid a fee-less credit card?

  • Last Updated:
  • Oct 18th, 2018 12:22 pm
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Rockstead wrote:
Oct 4th, 2018 5:08 pm
I’m with TD for all my banking but I primarily use the $100/yearly scotia Momentum Visa Infinite becusse it is the best cash back card out there.

I’m at the point that I need to provide my child a credit card to manage occasional purchases, but primarily for emergencies. The volume will be so low that it doesn’t make sense spending the $30 for an additional Momentum card, I was just wondering what is the best way to manage this?

Do I get a fee-less TD credit card under my name and then a free secondary under the child’s name, I will never use that primary, I have no need for it, or can I get a primary card under my child’s name that is still linked to my TD account and that I can still have full control over, I’m not sure what’s possible.

Thanks for sharing your experience.
Your best bet is to get a feeless credit card under your name with a secondary card under your child’s. You child will most likely not be able to get their own. However, you never know, I actually had credit cards under my own name when I was 14, but they were stroe cards, and many years ago.

Keep in mind this will nothing for their own credit. However, you may want to consider a card at an institute that they will bank with when they are 18. This may make it easier when they get their own card.

How old is you teen? If they are almost 17, I would see if they can get their own card under their own name. Or call the bank that you have a relationship with and see what they could do.

Again, you need to consider what is the purpose of this. You mentioned building credit, which it won’t do. Teaching them about credit, which it won’t really do as you have full control. This will teach them about reviewing the bills, but most likely not much more. Based on the spending, points are moot.
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Rockstead wrote:
Oct 8th, 2018 2:03 am
I hear you on the prepaid visa but I seem to recall that the monthly fees were high and would slowly consume the value of the card?

Having something I could top off would be ideal as long as fees weren’t stupid.

I thought of the Apple Pay, I figured I was violating my terms and conditions by having my card loaded on her iPhone and I wouldn’t be any to dispute any charges because a non card holder made the purchases.
The ones at places like Canada Post do have monthly fees (if I recall) but the big banks each have their own. For example, Scotia has a $10 yearly fee, allows you to earn points, free reloads, and you only pay inactivity fees if you are inactive for 36 months:
http://www.scotiabank.com/ca/en/persona ... -card.html

Perhaps this fits since you're already a Scotia client.
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Rockstead wrote:
Oct 8th, 2018 7:44 am
Because it’s 2018 and who carries cash, and yeah it’s a terrible thing to teach a teenager to budget their spending so that the bill is balanced at the end of the month, or to have a means of emergency payment for a taxi, food, allowance spending, whatever.

There are two kinds of people, those who use a card as a convenience and spend what they have and pay it off monthly at $0 cost and those who were never taught to properly manage their money and carry a balance on their credit card, I’ve already instilled in my kids to never be the second and using a credit card is not free money, I find people that think kids shouldn’t have them are the ones that were never taught to treat the card as your own money and can’t relate.

First thing they taught us in economics back in high school, never too early to build credit history.

Thanks for your wonderful input to this thread.
A bank account with real money is a better way. A kid should not be paying off debt they should be learning how to budget money and save.
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Dec 27, 2013
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Credit cards have the same effect as casino chips - they make it easy to forget how much you're spending. Our school curriculum is severely lacking in financial literacy - something that really needs to be talked about a lot more - so it's up to parents to help their kids understand the cost of money. Giving them a credit card that they need to pay off with their own money that they need to work for, and having specific consequences for not paying it off in full (e.g. extra chores around the house or loss of car priveledges or reduction in cell phone plan/minutes etc. to earn the money that you'd need to spend to cover their bill) will help them make the connection between the time and work required to earn that virtual "cash" that seems to come out of thin air whenever you swipe a credit card.
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Children do not need credit cards. No good can come from such a thing. He’ll, half the adults out there aren’t mature enough to handle credit cards properly.
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Rockstead wrote:
Oct 7th, 2018 5:07 pm
Maybe you haven’t compared cash back cards, Scotia Infinite can’t be beat.
How about a Visa with the same 4% / 4% / 2%/ 1% earnings on groceries/gas/drugstore/other as Scotia Momentum, but with much better insurance package (48 day travel medical, trip cancellation) and redeem your cash back any time (minimum $50) instead of waiting until November ever year? Meridian Visa Infinite Cash Back offers all of that, same $99 annual fee and $30 for supplementary cards (first year free). I ditched my Scotia Momentum card for it earlier this year and tons of RFDers who hang out in the credit card forum are doing the same.

Back on topic, just get whatever free card TD offers for yourself, get a supplementary card for your child.

That said...

We give our teen daughter an allowance of $100/month. When we started we just put it in her bank account and she used her debit card. After the first month she was shocked at how much of it she frittered away at Starbucks and Tim Hortons. Since then she has asked for cash, seeing the cash in her hand makes it seem more real, valuable, and finite, and she is much more easily able to control her spending with it. Works for her, works for us.
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Buy them an Apple watch or iPhone and link your card to it.
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Teach them to earn their money thorough work (house chores, helping a neighbour, even volunteering where the parent may subsidize their work). Children need to learn the value of money and also how to spend it frugally. All this foundation comes from a parent and not from an easy access to credit.
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Aren't there student credit cards still? I got something like that when I was a teen unless it was just the basic card. The limit was $500. I worked at McDonald's though so I don't know if that made it easier for the bank to give me a credit card. I used it for stuff that I bought and I only bought stuff that I was able to pay for. As in, I had the money for it. Nobody taught me that but it was probably instilled in me because I always bought stuff for myself using cash when I was younger (maybe 11). So, I always looked at how much I had and decided if I really wanted to buy something or not.

If your child doesn't know that yet then you should teach him/her this first and maybe getting an additional credit card on your account is the best way to go for now. This way you can keep an eye on his/her spending habits first. Make sure he/she understands how interest is calculated. Don't assume that he/she understands.
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Rockstead wrote:
Oct 7th, 2018 5:23 pm
We are a family of 6, heavy spenders on groceries, I easily get back $1250/year, and it’s ridiculous to tell me that Scotia isn’t the best and then tell me to juggle my spending between 3 credit cards.
Hey i'm curious. As a family of 6 what is your annual rate of points return on that card. I kept track of all my purchases over 5 years and categorized everything. It then made it easy to calculate wether these 4%/4%/2%/1% cards were better than something like a flat 2%. Most people i know who did this found that their rate of return fell somewhere below 2%.

You've already said you get $1250 in points per year. Someone said they calculate Nov -> nov. so add up those 12 months of bills and see what your total is. Working back from rewards and using possible rates of return we get.

Code: Select all

Rewards	   Rate of return     Annual Spending 
$1250      1.5%	              $83333
$1250      1.75%              $71428
$1250      2.0%	              $62500
$1250      2.5%	              $50000
$1250      3.0%	              $41666
$1250      3.5%	              $35714
$1250      4.5%	              $31250
[OP]
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Kevinck wrote:
Oct 16th, 2018 2:10 pm
Hey i'm curious. As a family of 6 what is your annual rate of points return on that card. I kept track of all my purchases over 5 years and categorized everything. It then made it easy to calculate wether these 4%/4%/2%/1% cards were better than something like a flat 2%. Most people i know who did this found that their rate of return fell somewhere below 2%.

You've already said you get $1250 in points per year. Someone said they calculate Nov -> nov. so add up those 12 months of bills and see what your total is. Working back from rewards and using possible rates of return we get.

Code: Select all

Rewards	   Rate of return     Annual Spending 
$1250      1.5%	              $83333
$1250      1.75%              $71428
$1250      2.0%	              $62500
$1250      2.5%	              $50000
$1250      3.0%	              $41666
$1250      3.5%	              $35714
$1250      4.5%	              $31250
Damn, I didn’t feel like adding all the totals, so I had to learn algebra all over again, but I got it.

So my averages are very close for all years

Cash back Cash Back rate Amount spent
$600. 4%. $15,000
$150. 2%. $7,500
$350. 1%. $35,000

2% on my total spent = $1,150 vs 1,100 I got back on mine. If the 2% card was free and had no cash back limit then it would be worth switching because I would also save the $100 on the fee + $30 on supplementary cards, but not worth it if there is a cash back limit and requires additional work, like juggling 3 cards, I’m down with it but there will be no way my wife will be.
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just get a student card, i got my own card when i was 18. no one needs cash back and all these points and crap for their first card,. they are just figuring out how to use it, let them learn first about getting a bill and paying it off, once they get experienced with paying off the bill then they can apply for the points and cash back crap later on in life
Hi
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^ +1. My daughter got her 1st card during grade 12 and by 2nd year undergrad, her Equifax/Transunion scores were already > 800. It's a great way to build up their own credit by having their own cards.
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Rockstead wrote:
Oct 17th, 2018 1:40 pm
Damn, I didn’t feel like adding all the totals, so I had to learn algebra all over again, but I got it.

So my averages are very close for all years

Cash back Cash Back rate Amount spent
$600. 4%. $15,000
$150. 2%. $7,500
$350. 1%. $35,000

2% on my total spent = $1,150 vs 1,100 I got back on mine. If the 2% card was free and had no cash back limit then it would be worth switching because I would also save the $100 on the fee + $30 on supplementary cards, but not worth it if there is a cash back limit and requires additional work, like juggling 3 cards, I’m down with it but there will be no way my wife will be.
No need to juggle cards. If you used only the Rogers MasterCard with no fee and 1.75% CB, you would have come out ~$35 ahead after subtracting the $130 in fees.
[OP]
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superfresh89 wrote:
Oct 18th, 2018 10:41 am
No need to juggle cards. If you used only the Rogers MasterCard with no fee and 1.75% CB, you would have come out ~$35 ahead after subtracting the $130 in fees.
You’re right, it’s a good option and would allow me to satisfy my requirement of additional cards for the family, but at the same time I’m questioning on paying the same that I am now for Scotia Visa Infinite and going to the Meridian Visa Infinite which has better insurance coverages.

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