How Gift Cards Can Teach Kids About the Responsibilities of Credit Cards

Kids see us swiping credit cards and debit cards at checkout counters all the time. Everything from the shiny plastic finish to the embossed, metallic, lettering makes kids wish they had one too. While most parents would not want to hand over their Mastercards to their kids, a child’s interest in credit cards presents a very real learning opportunity.

Wowed by the coolness factor, children don’t really understand that credit cards ownership comes with a set of responsibilities. They consider them as these magic cards that can pay for anything they want. Unfortunately, this is a mindset that often doesn’t change with time. Excited after receiving their first credit cards, young adults often end up overspending without fully realizing the financial repercussions. Credit card debt can quickly spiral out of control and thus children need to be taught the basics of financial management. 

How Can Gift Cards Help?

To a child who is influenced by the look and feel of a credit card, retail gift cards can look similarly appealing. Much like credit cards, gift cards can also be swiped at partner stores and they can be used to buy stuff. Unlike credit cards, however, gift cards are prepaid and thus can never lead to financial ruin. This means kids can enjoy using gift cards like credit cards without the inherent risk. Parents need to sit down with their kids and make them understand the basic concept of a gift card. Children given gift cards need to understand that they come with a pre-filled value and with each transaction that value gets depreciated. Once they understand, it’s important to take a step back and grant the kids a certain degree of freedom.

3 Reasons for Using Gift Cards as Dummy Credit Cards

A Lot of Them Look like Actual Credit Cards: Gift cards are often manufactured using the same composite plastic material that’s used to make credit cards. Much like bank cards, retail gift cards can also have magnetic strips and embossed lettering. The identical look and feel ensure that children are excited about their gift cards. To ensure it looks ‘authentic’, parents can browse and find a plastic gift card online that looks more convincing than others.

Shatters the Enigma: Gift cards are like the kiddie pools. They give children the same degree of fun but without the risk of ‘drowning’ in financial debt. By giving kids gift cards, parents can shatter the mysterious enigma of a credit card. By the time the kids grow up to get their own credit cards, they would not be enticed by the shiny plastic card.

Teaches Them Financial Management: Now, because all prepaid gift cards have a certain value, kids have no choice but to plan their purchases. It’s important to buy them fresh gift cards periodically so that they are incentivized for saving them. For example, if a kid wants to buy the latest PlayStation, he or she would have to limit their spending till there is enough accumulated points or store credit to make that purchase.


  1. Janet W.
    April 11, 2018 / 10:23 am

    I've never thought about how using a gift card can teach about how you're using up money like when you swipe a credit card! What a great idea!

  2. tat2gurlzrock
    April 11, 2018 / 4:11 pm

    I never had thought about it but this is a terrific idea!

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