Should Your Teenager Have a Credit Card?

Some Points to Consider

Teenager Have a Credit Card?Once upon a time credit cards were the exclusive province of adults, and even high earning workers often had problems qualifying for a credit card. Landing that first credit card was looked upon by many as a rite of passage, and the ability to qualify was seen as a badge of honor. These days many teenagers are being offered their own credit cards – and many parents are understandably concerned.

How things have changed. These days credit card offers are flooding the mailboxes of everyone from college students to Social Security recipients. In some cases even those too young for college are being offered their own credit cards, and that has led to a dilemma for many parents.

Many parents are understandably reluctant to allow their teens to sign up for a credit card, fearing that the credit will be used to fund frivolous purchases and that it will create a mountain of debt. These fears are certainly understandable, and many young people do get into trouble with credit cards. In fact the level of credit card debt among college students is on the rise, and this rising debt is certainly a cause for great concern. Many new college graduates are already saddled with tens of thousands of dollars in student loan debt – credit card obligations simply add to this increasing debt burden.

With all this in mind it may seem counter intuitive for parents to allow their teen aged children to experiment with credit cards before they leave for college. Even so, putting a credit card in the hands of your teenager can have some merit – as long as you are willing to set firm rules and follow through when they are broken. Letting your teen make his or her credit blunders while still under your roof is one way to reduce the risks once he or she
leaves for college and the world beyond.

One thing parents can do to teach these important lessons while mitigating the risk is to sign your teenager up for a secured credit card. Secured credit cards can be seen as financial training wheels, allowing inexperienced credit card users to learn from their mistakes, while reducing their risks.