Tips for Getting your Teens a Credit Card
Tuesday, February 19th, 2008Kids these days seem to have everything, don’t they? They carry cell phones and personal music players. They have a home computer and possibly even a laptop. Once they can drive, they begin begging for a car. And chances are that your teen has started asking you for a credit card. Should you get one for your teenager or not?
The decision about whether or not to get a credit card for your teen is a personal one. However, it’s increasingly considered a good way to teach kids about proper and responsible credit card use before they head off to college. Once they’re out of the house, you are going to have a lot less influence on their spending so getting these good credit habits established early might not be a bad idea.
Here are some tips to follow when getting your teens a credit card:
• Make them responsible for some other type of payment first. For example, if your teen has a cell phone, she should be responsible for her monthly phone bill. If she can’t manage this for six months, she can’t get a credit card yet.
• Require that your teen has a source of income. You can’t pay for your purchases if you don’t have a job so make sure that your teen has a job for at least a short period of time before a credit card is obtained.
• Demonstrate proper credit card use. You should be open in communicating with your teen about your own credit card use. This is particularly true in the months leading up to getting the credit card. Kids learn by example so make sure that you’re making some good choices in credit card spending.
• Compare different cards. Your teen should be included in choosing the card in order to learn the different things to look for when doing credit card applications. You should discuss interest rates, annual fees, rewards and other terms and benefits. Ideally, you’ll want to get a card with a low credit limit, low interest rate and no fees.
• Discuss the seriousness of co-signing on a card. Make sure that your teen understands that his poor credit can become a problem for you. Discuss the consequences for bad credit card behavior.
• Monitor your teen’s credit card use. You wouldn’t just hand over the car and tell your kid to go do whatever she wanted. The same rule should apply to credit card use. Yes, it’s her card and she needs to learn to use it but you should know what she’s buying and how she’s paying it back.
The main thing that you need to remember when getting a credit card for your teenager is that open communication will ultimately lead to good choices. It is your responsibility as a parent to teach your kids about becoming responsible adults. In today’s world, that means teaching them about their finances.
