How To Choose a Family Credit Card

Choosing the Best Credit Card for Family Expenses: A Parent's Guide

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.

• Credit cards are essentially loans that need to be paid back.
• Debit cards pull money straight from your checking account. So the amount you have in your checking is what you have to spend with a debit card.
• Prepaid cards are exactly what they sound like: cards that are loaded with a balance ahead of time which serves as your spending limit. They can be reloaded with more money and sometimes come with additional fees.

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.

Why Families Need a Specific Credit Card

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.

Key Features to Look For in a Family Credit Card

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.

Reward categories that suit family spending

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.

Competitive APR and low fees

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.

User-friendly online and mobile interfaces

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.

Top Family-Friendly Credit Cards

So, what are some of the top family-friendly credit cards out there? Here are a few from Credit One Bank:

• Looking to earn rewards for your everyday purchases? The Credit One Bank Platinum X5 Visa offers 5% cash back rewards on the first $5,000 of eligible gas, grocery, internet, cable, satellite TV, and mobile phone service purchases each year, then 1% thereafter. Plus unlimited 1% cash back rewards on all other purchases. The X5 comes with a $95 annual fee.
• Does your family like to travel? The Credit One Bank Wander^® Card offers 10X rewards points on eligible hotels and car rentals booked using their travel partner, 5X rewards points on other eligible travel, dining, and gas buys, and 1X rewards points on all other purchases. This card has a $95 annual fee.
• If you want to earn cash back rewards without spend categories, the Credit One Bank American Express^® Card offers unlimited 1% cash back rewards on all purchases and comes with a $39 annual fee.
• This is by no means a complete list. Not even close! There are a lot of family-friendly cards out there, each offering its own rewards, features, and fees. So, if you’re in the market for a new card for your family, do your research, see what different issuers offer, and choose one that fits your needs.

Making the Most of Your Family Credit Card

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.

Strategic spending and payments

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.

Utilizing card features and benefits

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.

Teaching Kids About Credit Card Usage

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:

• Offer them an allowance in exchange for work around the house — if they’re not old enough to get a job, this is a good way to teach the concept of working hard for your money.
• Encourage them to create a budget — you can help set up a spreadsheet to track their spending.
• Add them as an authorized user on your account (if they’re old enough) — talk about a first-hand lesson in managing credit and accountability.

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.