Your Teenager’s First Credit Card

If you’re a parent who is thinking about giving your teenager the responsibility of having a credit card, there are questions you may want to consider about your teen before allow that responsibility. Credit cards are quite notorious instruments for self-indulgence, and the number one source of personal debt in the nation. You, yourself may have had an experience or two indulging yourself and racking up the credit card balance since it’s that easy.  However, using your credit card responsibly can help make wonders when you finance Big Ticket Items (i.e. house, car, business, etc.) since it helps to increase your credit score. But oftentimes, many adults have an extremely difficult time from refraining themselves from using plastic to fulfill their indulgences – whatever it may be. As hard as it is for adults, in the hands of a teenager there could be even more problems if ill advised and there is lack of self control.

Adolescence is a time for growing up and growing pains, and if you’re a parent who’s wondering whether you should give your teenager a credit card or not, the age  and maturity is clearly going to be a big factor in your decision. Is your son a hard-worker? Does your daughter help out around the house? Is she eager to get her first job, because she can’t wait to have the freedom to buy the clothes she wants? Or is your son the opposite of resourceful and self-sufficient, and just wants to hang out with his friends? When it comes to questions of responsibility – and that’s what a teenager with a credit card boils down to – you’ve got to take a long hard look at your teen and make a character call. This is especially true if you end up being the co-signer in order to obtain the credit card in the first place – say if Junior racks up thousands of dollars in charges and can’t pay for them, guess who will have to pick up the tab? It would be YOU.

If your decision is to teach your teen the importance of self control and being financially responsible – a good rule of thumb is to allow a small line of credit in your teen’s name. The preferrable credit line would be the amount you would be able to afford to pay off yourself should your teen cannot control his or her spending habits and cannot pay off the amount. This way, you control your teen’s spending and at the same time teach them the importance of being financially responsible.