Should Teens use Credit Cards?
Look at how teens spend the money they earn and then look at how they spend other peoples money. Some teenagers get their paycheck and it’s gone the next day while others saver every penny because they know it’s all they’ll get and they understand the value of a dollar.
When a teenager gets money in a gift from their grandparents or their parents give them money, the same goes here. They either spend very carefully and save what they can or they blow it all faster than they got it.
If you think about it, teenagers don’t spend money much differently from adults. How anyone spends money, teenager or adult, is all in how they were raised. If your parents taught you the value of money and how to save as a child and has you grew up, you are probably much more financially responsible.
Giving Your Teen a Credit Card
If you are thinking about getting a credit card for your teen, think about why you want to. Do you want to teach them financial responsibility or are you just tired of them asking you for cash?
If your teen is not financially responsible, getting them a credit card is NOT a good way. They will only get themselves into debt that may cripple their future. First, you must teach them how to manage their own money. Don’t give them an allowance, have them get a job and make them pay for expenses such as gas, insurance, cell phone, and anything extra.
Teach Them First
If you feel your kid has a good grasp on money and how to save and budget effectively and responsibly, talk with them first about credit cards. Explain to them the importance of paying off their balance every month and not charging more than they can afford. As they get older, a credit card may help them to build credit so they can get a loan for a car or house later in life.
If your child still doesn’t understand the idea of credit and money management, get them a prepaid card and treat it like a credit card. Load the money on and give them a bill from you. Charge them interest when they don’t pay on time. This way, you can teach them a lesson without them getting into real debt. Of course, don’t just pay it all off when they fall behind, that defeats the purpose of the lesson.
Should teens have a credit card? It won’t hurt to let them wait. Having a credit card now will help build credit, but it’s important that they only do so if they have proved to be financially responsible. Also, they really shouldn’t be under 16. If they aren’t old enough to drive and hold a regular job, they shouldn’t need a credit card.
It’s in Your Hands
Ultimately, it is your decision. You must decide if your child is responsible enough to handle their own credit. If you are just looking for a way to give them money without using cash, I suggest a prepaid card.
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