Five things to consider before financing daycare

NerdWallet recently interviewed POWWOW for an article on an issue plaguing most young families – how to afford daycare. More families are relying on daycare due to a number of factors:

  • Cost of care skyrocketing due to high overhead and liability concerns
  • Grandparents working longer to afford retirement
  • Ease of travel and relocation causing families to widely disperse
  • The cost of living in many areas often requires dual-incomes

So what can be done? Tackling the root of the issue to avoid the need for daycare altogether would be a financial dream, but it’s not always possible. Many families have opted to utilize their credit cards to finance care despite the fact that they typically have higher rates than other means of financing. The goal is to push through the handful of years that require daycare before the child can go to public schooling for free. It’s not a bad idea – if you’re careful! Let’s look at the pros and cons.


  • Rewards points
  • Fastest/Easiest form of financing
  • Flexibility in payment amount


  • Not all care providers accept credit cards
  • Quick way to rack up debt if no plan is put in place
  • Potential for high rates depending on credit history

The biggest benefit of utilizing daycare, even if it’s done via financing, means that both parents are able to continue working. For women especially, stepping away from the workforce can be financially detrimental in many ways apart from simply losing out on the income during that period of time. More can be read on that here. If you have apprehension, an analysis can be done to estimate the true cost of leaving the workforce vs. the cost of daycare to see how you can come out ahead.

Check out NerdWallet’s article to find out more about utilizing a credit card, and the five things to consider. “Should You Use Credit Cards to Pay for Child Care?” by Kim Palmer.