Author: Marc Klein
October 05, 2023
Topics:
Credit CardLearn how to choose the best credit card for your family's expenses, with features that benefit parents and enhance household budget management.
A credit card can be a useful tool when it comes to paying for family expenses.
As you probably know, a credit card is a thin piece of plastic (or sometimes metal) issued by a bank or financial institution. This card allows you to borrow funds to make purchases under the agreement that you pay that borrowed money back, plus any interest or fees accrued.
How a credit card works can be a complicated dance between you (the customer) using your card at a merchant, your card information making its way between the acquiring bank, card network, and issuing bank for approval (or rejection) … and then back to the terminal at the merchant where you hopefully get to walk away with your purchase. All within minutes.
And credit cards aren’t the same as debit cards or prepaid cards.
While each have their pros and cons, only your credit card has a direct relationship with your credit score. Your credit score can determine whether you’re approved for a credit card, as well as the type, amount, and terms of credit you’re offered. How responsibly you use your credit card — along with your ability (or inability) to make timely bill payments — also impacts whether your credit goes up or down.
Between bills, meals, medical costs, school supplies, and a variety of other things that pop up on a daily basis, family expenses may seem like they’re never-ending. So it’s important to always have a plan to handle those costs. One option is to use a credit card.
By choosing a credit card that suits your family, you can manage your costs, build a positive credit history (assuming responsible use and timely payments), and earn rewards in the process.
There are many types of credit cards out there for your family. And just as each family is unique, most credit cards are different in their own ways. Selecting the right card for your family is a matter of comparing credit card options and finding one that checks all your required boxes.
Most credit cards offer some sort of reward (such as cash back rewards or redeemable points) for purchases in specific categories, ranging from gas and groceries to travel purchases.
So, if you’re looking for a rewards credit card that’s right for you and your family, consider what you’re spending your money on and find a card that provides rewards in those categories. If you’re already spending money on these things, why not earn cash back in the process?
For example, say your family drives a lot. Wouldn’t it be nice to earn cash back rewards every time you fill your gas tank? Used correctly, a rewards credit card can provide pretty substantial returns on these expenses.
When sifting through credit cards, weigh their annual percentage rate (APR) and fees. Having a competitive APR and low (or no) fees can go a long way in helping manage expenses and avoid debt. Nobody likes paying anything beyond what the price tag says.
Find a card that’s user-friendly. Being able to easily access and manage your account — online and via mobile app — is always a plus. The last thing you want is to struggle with your account, especially when you have a bill to pay. Plus, the ability to track and manage your expenses can help you keep your debt in check.
So, what are some of the top family-friendly credit cards out there? Here are a few from Credit One Bank:
Just having a family credit card doesn’t mean you’ll automatically start seeing the benefits. It’s important you use the card properly to get the most out of it.
First, be strategic with your spending. Don’t make purchases on items you can’t afford or don’t have a plan to pay off. And use your card on purchases that fit your lifestyle. If you have a card that offers cash back rewards on specific categories, then take advantage and use the card on those categories.
Making timely payments is also one of the most important things you can do to improve your credit score. Plus, the lower your balance, the less interest you’ll accrue. The best way to avoid interest charges is to pay off your credit card balance in full each and every month, and early enough in the month (before your closing date) so it doesn’t calculate.
And don’t forget about the other features and benefits that come with your card. They’re there for a reason. Want to be reminded to pay your bill or get other important notifications? Customize your account alerts. Want to ensure you never miss another payment? Set up AutoPay.
There are many features available to you that are there to help. You just have to use them.
An unexpected benefit from having a family credit card is that it can be a good tool to teach children about the importance of smart money management. What better way to teach about responsible credit card use than to actually show responsible use of a credit card?
Looking to teach financial literacy and good credit habits to your children? Here are some tips:
These are just a few examples. Every kid is different, and you know how best to teach them. But starting their financial education early can help instill good habits and set them on the right financial path as they grow older.
About the author:
Marc KleinWith his eyes set on becoming the next great ad man (at least until his comedy writing career took off), Marc earned his journalism degree and went straight into advertising for various gaming and tourism clients. He later expanded his credentials to include public affairs and communications work for several environmental science organizations before returning to his marketing roots. A lifelong scholar with recent studies in strategic communication, Marc enjoys tying humor into his writing and simplifying complex financial subjects into engaging and easy-to-digest content for a wide variety of audiences.
This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.