Monday, July 12, 2021

And Now My Kid is Getting a Credit Card: Earning the Girl Scout Ambassador Good Credit Badge

In case you ever wonder why my kid's Girl Scout vest always looks sort of ratty, it's because of stuff like this!

I'm just trying to take photos of some of the new badges and fun patches that I sewed onto Will's vest, but somehow I've instead created a nap landing spot for Gracie:

Next question: is she attempting to frame or to hide the newest badges that I'm trying to photograph?

Answer: Hide them. She's DEFINITELY trying to hide them:

She can't outlast me, though! She always gets hungry for canned cat food before I do!

Here, then, is Will's newest Girl Scout badge: the Ambassador Good Credit badge!

I am often wowed by how just plain USEFUL Girl Scout badges are! Like yes, fine, I did need a Girl Scout badge as an excuse to teach my children valuable life skills multiple times in their lives already. Girl Scout badges were their gateway into learning how to complete a sales transaction (from both sides of the counter), do laundry, make small talk, open their own bank accounts, start a camp fire, learn CPR, and write a business letter. 

And now a Girl Scout badge is the reason that my kid is getting a credit card.

The Girl Scout Ambassador Good Credit badge is a super useful introduction to the nonsensical world of imaginary money that is our credit system, and because it involves traipsing through so much of a family's personal financial information, it's a terrific badge for a Girl Scout to do independently. Matt and I provided much of the resources that Will used to earn this badge, and I think that it helped our entire family be more thoughtful about our financial future.


To learn about credit scores, Will first read some interesting articles online. This one is mostly about credit utilization ratios, but includes a lot of other general information about what makes up someone's credit score, and this one is mostly about how to improve your credit score, and so contains even more of the same type of information.

It also contains this very interesting piece of advice:

"Your length of credit history plays a role in your credit score. FICO bases 15 percent of your credit score on factors such as the age of your oldest account and your average age of all accounts. Older is better. [...] If a friend or relative adds you to an existing credit card as an authorized user, it might help lengthen your credit history." ("How to improve your credit score"

That got me thinking that in the near future, it actually would be handy to have Will as an authorized user on our credit card. She'll be driving soon, so not only does she need an emergency source of money, but it would be handy if she could gas up the car or grab a few groceries if she's out. And for the long-term, it sounds like being an authorized user on our card would both increase Will's direct credit history and possibly benefit her additionally due to the fact that we've had our credit cards longer than we've had her. 

I know y'all have probably already thought of all this practical stuff in terms of your own teenagers, but I apparently need a Girl Scout badge to teach me how to parent. 

Another useful thing that Matt and I did for this step was, of course, obtain our own credit scores. We sat down with Will and walked her through the information there, showing her the list of accounts both open and closed, the payment histories, etc. Fortunately, there was no wonky information that needed to be corrected, but if there had been, that would have been a good lesson to walk through with her, too!


The postal service hand-delivered us almost all of the materials that we needed to complete this badge! When the mortgage bill came, Matt and I also went over it with Will. I guess it's good to get over your sticker shock about what interest rates actually look like when you're young! I didn't learn until my own first mortgage how much of one's payments go toward paying interest, and it was a very unpleasant realization.

If I'd wanted more enrichment work in this step, I could have had Will makes some charts of our mortgage, interest, and payments over time, or have her calculate what would happen if we made extra payments. It's also very useful to learn the effectiveness of paying down one's debt!


Thanks again to the post office for this step! For a few weeks, we collected the credit card offers that came in our junk mail. Will read this article on how to evaluate credit cards as a young adult, and then she opened all our junk mail, researched each offer, looked up more info about each credit card online, and then compared and evaluated the cards. She came up with her own criteria for evaluation, and now has a better understanding of what she should look for when considering signing up for a new credit card.


This was an interesting component of this badge, because the Gold Award project that Will's working on actually involves teaching/encouraging kids to interview the elderly people in their lives. So not only did Will get to practice more interview skills herself, but this step also got her thinking about what other Girl Scout badges could benefit from specific instruction about how to best interview older folks, and now she's got more content for her project!


It had never before occurred to me to ask Will to map out her financial future, but it was a very enlightening task that got her thinking about her future wants and needs and how she might incorporate them into her life plans.

OMG, you know what else happened during the course of this badge? As I was researching it, I saw several places the piece of advice that you should compare local banks to make sure that your money is earning the best interest rates. Matt and I have long bitched about how insultingly, laughably small the interest rate for our savings account is--like, it would be less offensive if they didn't even pay us any interest at this point--so I checked out the websites of some of the other banks in town...

...and learned that our local credit union's interest rate for a comparable savings account is literally over ten times our own bank's interest rate.

So we switched banks.

Here are some of the books that Will and I consulted while earning this badge:

It also just occurred to me that the podcast about scammers that Syd and I obsessively listen to is perfect for this badge!

P.S. Want to see more useful projects with teenagers as they happen? Check out my Craft Knife Facebook page!

No comments: