Greenlight, a Fintech company that helps teach financial literacy, today announced a credit builder for teens to build credit before they turn 18. Parents can now add teens as authorized users to the Greenlight Family Cash Mastercard.
In a release, Greenlight said 84% of teens ages 18 and 19 have zero credit history, making it difficult to start adulthood with financial independence and limiting opportunities to get their first job, car, or home. In a new national survey, Greenlight found that 94% of parents agree that credit knowledge and skills are important for their teens’ futures, and 80% wish they had better tools and resources to teach teens about credit.
With the Greenlight Family Cash Card, teens can track their balances within the Greenlight app, while parents can set flexible spending limits and get real-time purchase alerts. Greenlight’s in-app financial literacy game Level Up also includes new credit lessons to empower teens with more financial knowledge and confidence. Together, families can earn up to 3% cash back on all teen and parent purchases with the Family Cash Card.
Additional findings illustrate the impact of limited and poor credit history. Two-thirds (68%) of parents say they have encountered a roadblock for life events due to a lack of credit history or poor credit. A similar number (67%) said they did not learn about credit before they were 18, and 83% wish they had more credit education growing up.
Better education would help. Half of parents (49%) feel education would have improved their financial wellness. One in two would have more financial confidence, while slightly fewer (47%) said they would be better at budgeting, 38% would have avoided credit card debt, and 36% believe they would have a better credit score.
Parents need better tools to teach their kids about credit, with 94% saying credit knowledge and skills are important for their teens’ futures. Half (51%) wonder if teens are too young to responsibly use credit. Just under 30% fear the kids will overspend.
More than half (58%) of parents haven’t discussed credit with their kids, 43% haven’t mentioned credit scores and 41% haven’t explained the differences between debit and credit.
Teens also want more financial education. Half admit they have experienced financial stress and anxiety. Personal finance is the top adult responsibility they wish they had more education around, and 81% of teens say they want more credit education. More than 40% do not know what a credit score is, while 72% of teens are only somewhat or not at all confident in their credit knowledge and equally unsure they have enough education to live a financially independent life.
“At Greenlight, we’re committed to helping families build healthy financial futures, and we know credit is a big part of financial wellbeing,” said Tim Sheehan, co-founder and CEO at Greenlight. “With Greenlight and our new credit builder, teens can easily build credit before they turn 18, setting them up with a strong financial foundation and better opportunities.”