Ages 16–18

Credit: the thing that follows you

A credit record is a file about how reliably you repay. It starts the first time you borrow and it is read by people you will never meet.

About 25 minutes Read it themselves Earns The Three Rules Badge

The Quest

For the kid

Credit is a file, kept by two credit bureaus in Canada, recording whether you paid things back on time. The score summarises it.

It is read by a landlord, a lender setting your mortgage rate, a phone company deciding whether you need a deposit, sometimes an employer — none of whom will meet you.

What is in it

Part of the file	What it records
Payment history	Did you pay, and on time. The biggest part
Credit utilisation	How much of your credit you use. A balance near the limit reads as strain even if you clear it
Age of accounts	Length helps — the argument for starting early
New applications	Several in a short window reads badly

The part nobody explains

A credit card charges interest only on what you carry, not on what you spend. Pay the full statement balance by the due date and you generally pay nothing, while the card still builds your file. Pay the minimum and the rest carries at a rate designed to keep the balance alive.

Your mission

Write down three rules you will not break, in your words, on paper:

Pay the full statement balance every month, by automatic payment.
Never put money on a card that is not already in the account. It is a payment method, not extra money.
One card until the habit is boring. No store cards at the till for a discount.

Sign it and date it.

The Parent Playbook

For you — read before you start

There is a real decision here, and it goes both ways.

The authorized-user question

You can add your teenager to your own card. They get a card on your account; you stay legally responsible.

The case for it. Length of history helps, and a low-limit card used for one predictable thing and paid off monthly in front of them builds the habit.
The case against. Your account, your liability. If your utilisation is high or your payment history imperfect, you may be handing them a weaker start.
When not to do it. If your card carries a balance you are managing, or if you will not look at the statement with them monthly.

What to say

"This card is on my account, so if you do not pay me back, I pay it. One thing goes on it — your transit pass — and we look at the statement together on the first of every month. At eighteen you apply for your own."

When they want a store card for the discount at the till:

"That discount is a few dollars once, the application goes on your file, and the card carries a high rate. Take the discount out of my wallet instead."

Mistake to avoid

Do not co-sign a loan to build their credit. Co-signing is you borrowing the money with extra steps — fully liable, and it commonly ends in a debt and a damaged relationship.

Do not let the first card have a high limit. The limit is the size of the mistake available.

Do not hide your own imperfect credit history. "I learned this the hard way and here is what it cost me" is the most persuasive version.

Do It Together

The 25-minute activity

Pull the first statement apart 20 minutes · one real credit card statement and a calculator

Find four numbers: full balance, minimum payment, interest rate, due date.
Read the minimum-payment box out loud. Canadian statements disclose roughly how long clearing the balance would take on minimum payments alone.
Do the arithmetic yourselves. Apply the monthly rate, subtract a minimum payment, repeat for a year.
Convert it into their units. Total interest ÷ their hourly rate = hours worked for nothing.
Write the three rules and both sign them.
Set up the automatic full-balance payment before you leave the table.

Done? Tick the level. Next: the accounts that unlock at eighteen.

Done with level 03?

Fills in one leaf on the Makers map and earns The Three Rules Badge. Kept in this browser only — nothing about your child is sent anywhere.

Financial education, not advice. It describes how Canadian accounts and programs work and recommends no product, provider or investment. Dollar figures are statutory.