The survey findings point to a need for families to have more direct communication about money, Schulz said.
“It’s really important that folks have those conversations with their kids and set the boundaries, set the guidelines and make sure the kid knows what’s going to happen if they drop the ball,” Schulz said.
Adding your child as an authorized user of your credit card can be a good idea and help provide valuable money lessons, said financial advisor Roger Ma, founder of Lifelaidout.
The key is to set specific guidelines, Ma said. That includes identifying the situations in which they are allowed to use the card, the maximum amount they are allowed to spend per month, who will be responsible for paying off the balance each month and what the consequences will be if they do not follow those rules.
To better track their activity, parents may want to consider adding their children to a new card or one they do not use as often.
“Adding a child as an authorized user could be a good way to increase a child’s financial literacy, and potentially their credit score, as long as the proper expectations are set and communicated up front,” Ma said.