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  • Posted October 31, 2019

Credit Cards and Autism: What to Know

Parents of special needs children may have to pay for tutors, home improvements, or other items that will make their children’s lives easier. Those who have disabilities may find it difficult to get a job or find insurance policies that pay for all of their medical needs. Therefore, a credit card can be an important tool to help cover emergency expenses or to simply live between pay periods. Although money management is not often a part of the curriculum for children with autism, financial literacy and—eventually—financial independence is crucial.  

Potential Risks

For many people—even those without autism—there is a chance that they will spend more than they can afford to repay in a timely manner. Credit cards can have interest rates of up to 29.99%, which means that it can be difficult to make more than the minimum payment as your balance increases. Missing a payment could lower your credit score by up to 100 points or more. If you have to file for bankruptcy because you can’t afford to make timely payments, your credit score could plunge by up to 200 points or more.

Do You Have a Credit Score?

A good credit score can offer financial freedom because you will be able to obtain credit at a low-interest rate. This can make it easier to purchase a house, go to school, or make other purchases that could potentially increase your net worth or future earning potential. Credit card companies and banks evaluate losses long-term, so they use credit scores to determine potential long-term behavior. Credit scores range from 300 to 810, and they are determined by your payment history, age of credit, and your credit utilization rate. 

If your child is in school, they can start to build credit by obtaining student credit cards that offer low credit limits and interest rates. This makes it easier for them to learn how to make payments on time and build a positive credit history. Because schools don’t often prioritize teaching money management skills to autisitic children, it may fall on you to teach them these important lessons.

How to Manage Credit Card Debt

There are many strategies that you can use to keep your credit card debt to a minimum. For instance, you can ask a credit card company to lower your balance to prevent you from spending more than you can afford to repair. It may also be possible to use a balance transfer or a debt consolidation loan to reduce the amount of interest paid to a credit card company each month. 

Neurotypical or neurodiverse, your credit score is the most important number in your adult life. If necessary, you can work with a financial advisor to learn ways to keep debt to a minimum or to get out of debt in a timely manner.

Looking for more ASD-specific financial advice? Contact us for a free initial consultation to start your financial planning today!