Q: My 18-year-old is still living at home, but she is not a kid anymore. she wants to be independent. How can I best prepare her for financial responsibilities, like credit cards?
A: Just as you wouldn't just toss your son or daughter the keys to the car without teaching them to drive, you shouldn't let them get a credit card without a few lessons in using it responsibly.
Here are some tips on getting your kids on the right track.
Start early. Consider giving them an account and a debit card while they're in high school. You can put their allowance on it.
Supervise them closely in the beginning until they develop your trust. Another option: Arrange for a gas credit card once they start driving to get them in the habit of paying off debt on a monthly basis.
Graduate carefully. When you feel more comfortable, arrange for a credit card under your account -- in case of emergencies.
Or you could arrange for their own account co-signed — and therefore, monitored — by you. (Due to the 2009 Credit CARD Act, anyone under 21 without independent income must have the application co-signed by a parent.)
Look for low limits and low interest terms to keep the balance manageable. This latter option will also help them to develop a credit history.
Keep the conversation going. Developing a healthy relationship with credit is a journey, not a destination.
Share your own experiences (good and bad), and explain the importance of building a strong credit score. Beyond credit cards, you might want to touch on the many ways credit could come into play later in their lives for larger purchases — like their first car or home.