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  • Keallah Smith

Let's Upgrade our Relationship with Credit

Updated: Nov 4, 2020


We have to STOP teaching our kids that credit cards are bad. Instead, teach them how credit actually work and how to leverage it to their benefit. This is going to require a shift in how we think about credit and credit cards.

There are so many schools of thought out there around how to achieve "financial freedom". I generally respect all of the many routes out there because not everyone will have a different relation with money and will be starting their financial freedom journey from different starting points. But some advice that I hear from time to time just makes me cringe!

Cut up your credit cards!
Never get a credit card!
Pay cash for everything!

If you've heard any of these, then you've heard the same bad advice.


Join my next Financial Literacy for Kids class



It is not that credit cards are bad financial tools. The problem is that many people get credit cards without learning how credit works, how to use credit cards and how your financial decisions affect your credit score. Because of this widespread misinformation, credit card companies have been taking advantage of other for decades. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 addressed many of these predatory practices BUT education is still the best next step.

Why are credit cards important?

Imagine this…one day, you may want or need to borrow money, so where do you turn? You'll probably go to a bank. You may need this loan to buy a car, buy a house, pay for school, start a business, consolidate debt etc. What's the first thing the bank will do? They'll pull your credit to determine if you are worthy of a loan. But if you've never took the time to establish credit (by getting a credit card), you will most likely be denied. Having no credit is just as bad as having bad credit.

Common Questions From My Students [Join my next Financial Literacy for Kids class]

  • Are debit cards better than credit cards?

Honestly, debit cards and credit cards are two different tools and are both equally beneficial. Debit cards are linked to your checking account which will hold money that you've already earned. Credit cards will allow you to borrow money on credit and pay after you've made the purchase. Credit cards will charge you interest on the amount that you've spent.

  • How many credit cards do I need?

There's lots of temptation to get many cards but one credit card is sufficient for all beginners. Once you feel you are responsible or actually have a need for a second card, then you can begin to explore that option.

  • What happens if my credit card is stolen?

If you lose your credit card or if it is stolen, call your credit card company promptly and report the card as lost or stolen. The credit card company will put a freeze on the card so that whoever find the card will not be able to use the credit card. Then the credit card company will mail you a new card. The new card will be attached to whatever previous balance you had.


Instead of avoidance, begin to build a healthy relationship with money and finance. You CAN gain financial freedom without ditching credit cards.


Stay tuned for more tips!

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