‘How you handle this will have a lasting impact on her relationship with money’
Our 18-year-old daughter just admitted she’s nearly £3,000 in credit card debt.
We gave her the card for emergencies only, but she’s been using it more than she should – and now she’s stuck, trying to pay it off with babysitting money while interest piles up at 26 per cent.
It’s getting worse every month. We’re not sure what to do. Do we step in and pay it off to stop the bleeding, or leave her to deal with it so she learns a hard lesson?
We don’t want to bail her out and send the message that money mistakes have no consequences, but we also don’t want her drowning in debt at 18. What would you do?
DB, via email
If a teenager builds up a pile of debt, paying it off can take a long time and harm their long-term finances (posed by model)
Vicky Reynal, money psychotherapist, replies: This is a delicate situation, and how you handle it could have a lasting impact on your daughter’s relationship with money, so it’s worth approaching with care.
You’re right to resist the idea of a no-strings-attached bailout.
While it may feel like a quick fix, it risks sending the message that money mistakes don’t carry consequences – and that someone will always step in.
But letting her drown in 26 per cent interest at 18 could do just as much harm: a low credit score at the start of adult life can lead to very real, practical barriers like limited access to credit, difficulty renting and even employment hurdles.
And beyond the practical, it can leave a young person feeling ashamed, anxious and convinced they’re simply ‘bad with money’. That belief can follow them for years.
A no-strings attached bailout would be the wrong move to help with your daughter’s debt, says Vicky Reynal
So what’s the alternative?
I would suggest a middle way: step in, but don’t wipe the slate clean.
You could pay off the credit card directly to stop the interest compounding and then set up a clear repayment plan with your daughter.
Draft a simple loan agreement with regular instalments. You might even choose to add a small amount of interest – not to profit from her mistake, but to introduce the concept that borrowing comes with a cost.
It also helps mirror real-world financial consequences without the devastating impact of spiralling debt.
Charging a modest interest could also reflect the cost to you (for instance, if you’re dipping into savings).
Even if you’re generous by nature, unspoken sacrifices can quietly strain a relationship, especially if resentment builds over time and being transparent about expectations helps avoid that.
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Use this to build financial emotional intelligence
But beyond the logistics, what’s likely troubling you most is how your daughter got into this position in the first place. That’s a question worth exploring – and not just to assign blame.
Teenagers’ brains are still developing, especially the areas linked to impulse control and long-term planning. Add peer pressure, social media and a desire to fit in, and you’ve got a powerful cocktail influencing their spending decisions.
Managing money (a real cash allowance but also the money that becomes accessible through credit) is a skill that is learnt with experience.
It isn’t innate and sometimes lessons and warnings from parents aren’t enough to put in practice self-moderation, delayed gratification and resist external pressures to spend.
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Before you jump to solutions, try to understand what was going on for her emotionally when she made those purchases. Ask with genuine curiosity, not accusation.
It may sound simple – she wanted, she bought, now she’s in debt.
But beneath that, what desires or insecurities were at play?
Did she feel pressure to keep up with her peers?
Was she trying to look ‘cool,’ fit in, or avoid missing out?
Was she maybe trying to show off to her friends, feeling insecure or not ‘good enough’ in some way?
This kind of reflection builds something I call financial emotional intelligence – the ability to understand the feelings that drive our financial behaviours. And it’s one of the most valuable tools she can develop.
You might even share your own experiences: a time when you spent more than you could afford and regretted it. Not to make it about you, but to show that everyone makes financial missteps – and that what matters most is how we recover and learn from them.
What you can be sure of is that this experience will stay with her. And that’s not necessarily a bad thing.
When the stakes are higher in future, she’ll remember what it felt like to be in this position – and she’ll also remember that she took responsibility, made a plan and got back on track with your support.
If you handle it thoughtfully, this doesn’t have to mark the start of a negative money story but instead it can be the beginning of financial self-awareness.
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