People of all ages borrow. Some borrow toys, some borrow books and others borrow money. In all of these cases, responsible borrowing is important. Help your child learn how to borrow responsibly early in life.

Activity 1

There is a good chance your child has seen you use your credit card and your debit card, but chances are he or she doesn't understand the difference. In fact many young adults don't even know the difference.

  • Pull one debit card and one credit card from your wallet or purse.
  • Ask your child to tell you which is the debit and which is credit.
  • Whether they get it right or wrong show them all the physical similarities.
    • Same size, shape, your name, 16 numbers, black strip on back, image, bank logo, etc.
  • Now ask them if they know the difference between the two cards.
    • Debit Card: Even though this looks like a credit card it's simply access to your own money. If you use this at a store or ATM it takes money straight from your bank account. This is your money.
    • Credit Card: This card allows you to borrow money. Each time you use this card you are borrowing money from a bank or other institution. When you borrow you must pay it back - with interest!


Activity 2

If your child asks for something he or she cannot afford and would typically save for, consider lending your child the money as a way to teach responsible borrowing.

  • Discuss the importance of paying you back on a set timeline.
  • Discuss the interest you will charge him/her. Make it easy by adding a set amount to what they borrow.
  • Discuss what will happen if he or she doesn't pay you back on time such as an additional monetary fee or the inability to borrow in the future.
  • Show your child how these principles are the same for adults when they borrow money.