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Teaching children credit basics
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What are some key questions teens should ask themselves before borrowing?


By teaching your teen to ask themselves important questions about how and why they’re borrowing, you can help them avoid impulsive purchases and taking on too much debt

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Which is the better idea for covering emergency needs?


It's helpful to explain to teens that it’s a good idea to save some money for emergencies. That way, if unexpected expenses arise, they can avoid payday loans that come with high interest rates and fees — which can lead to cycles of debt.

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Key Takeaways

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The lessons parents impart today can help kids establish positive credit habits later. It’s important to talk to your middle and high schoolers about striking a balance between using credit — but not abusing it.

  • Make it clear to your kids that every time they swipe a credit card, they are actually borrowing money
  • Explain how interest works to set teens on the right track when they start managing their own credit cards
  • Help kids understand that even small purchases can become costly if they stretch payments out over a long time
  • Teach your teen that before, borrowing money, they should ask themselves some key questions: Is this purchase truly necessary? Is there room in my budget? Can I save money for a few months to pay without borrowing? And, after adding up the owed interest, will the purchase still be worth it? 
  • Take your teen through the mechanics of debt, including the consequences of loan default and the importance of maintaining a good credit score