Hey there! It's Talk About Money Tuesday, my favorite day of the week!π€
I just shredded a bunch of credit card offers I got in the mail, and I noticed they all used rewards programs to try to get me to apply.
For many adults, using credit card perks is just a normal part of managing finances. But for young people watching closely, rewards programs can send a message that doesn't quite ring true: Spend more, get more.
The reality is a bit more complicated. Without understanding why credit card perks exist and how they influence behavior, young people may grow up believing that credit cards are a shortcut to earning money. But really, they're a financial tool that requires discipline.
As a parent or mentor, you can help kids look beyond the perks and avoid spending more than they planned just to "earn" benefits that may not outweigh the cost.
Money Stat
37%
What's one thing that drives spending habits? The lure of credit card rewards. Thirty-seven percent of people said they'd use their credit card less if it didn't offer rewards, according to a survey from Ipsos.β
Meanwhile, nearly 70% of people said they actually prefer using their credit card specifically to earn rewards, which shows just how strong incentive behavior can be.
The takeaway: ewards don't just reward spending. They can also quietly reshape it.
Get in the Zone
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Money skill: How to spend with intent
Why it matters: A valuable lesson for young people to learn is how to make choices based on needs and priorities, not external rewards. This skill matters because rewards can hide the real cost of spending and encourage impulse buying or unnecessary purchases.
Try this: β‘οΈ Help young people sort expenses into wants, needs, and nice-to-haves. When they see where an item they want falls, it becomes easier for them to decide if it's worth it.
β‘οΈ Encourage a "cool-off" period before buying, especially for non-essential items. A built-in pause before buying (say, a day for bigger purchases) can reduce the kind of impulse decisions driven by rewards.
β‘οΈ Narrate your thinking when you use a rewards card to purchase an item. "I'm only using this rewards card because I was going to buy this anyway and then pay it off in full." This models intentional behavior.
β‘οΈ Reinforce moments when your child chooses not to buy something unnecessary. That's a powerful habit that's more valuable than any reward points or cash back earned!
The Language of Money
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Rewards programs come with their own language, but these youth-friendly definitions can help you talk about credit card perks with your kids:
Rewards program: A system where you earn rewards like points or cash back for using your card
Cash back: Money you get back from credit card purchases, typically a small percentage of what you spend
Points/miles: Credits you earn that can be used to pay for things like flights, hotel stays, or gift cards
Sign-up bonuses: Extra rewards you get for opening a new credit card and spending a set amount within a certain time period
Redemption: Cashing in your rewards for something you want
Looking for more youth-friendly personal finance terms to share with kids and teens? βDownload my Language of Money freebie. β
Loose Change
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π³ Some of the credit card rewards you get might be taxable. Click here to find out which ones.
π« If you get a text about your reward points expiring, it might be from a scammer.
π Credit card rewards can be used for lots of things, including funding a college savings account.β
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'Til next time,
Audrey
βFounder &
Certified Financial Education Instructorβ
The FinLit Zone
600 1st Ave, Ste 330 PMB 92768, Seattle, WA 98104-2246
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