Should Your Teen Have a Credit Card?
We should be very aware of what our teens get in the mail. Companies send them one credit card after another. Now, we all know how crazy some adults can get with a credit card, so can you imagine turning a teenager loose with one.
This is not to say that they should not have a card, for learning responsibility. This is as good a time as any to discuss a budget with your teen and let her see how the money is spent.
Every teen needs to learn how to budget money so that she can pay for the necessities, not the wants.
I do not know about you, but I have noticed that today kids say they need something, rather than they want it. They do not need an iPod, they want one.
Advantages of Your Teen Having a Credit Card
If this is what your teenager wants, now is the time to help her learn how to budget so she can afford to get something she “needs” occasionally. Help her to get either a secured credit card or a very low limit card. Show her the basics of how it works. Tell her what she is allowed to purchase with the card and what cannot be purchased. This may have to be a very detailed discussion so she cannot come back later and tell you that you did not say she could not have a new television.
Once you have obtained the card and she knows the basics, show her that charging the smallest amount and paying it on time will help her to qualify for more credit later. Show her how this affects her credit rating and what a good rating will qualify her for in the future.
Disadvantages of Your Teen Having a Credit Card
One of the things that your teen will have to realize is a credit card is nothing like winning the lottery. It does not enable her to spend as much money as she wants. Irresponsible spending is the main cause of credit card debt. Teach your child that if she has to ask herself if she can afford it, she cannot.
The attitude that plastic teaches us is buy now, pay later. This can be a good thing if it is properly handled. But it is just far too easy for a teen to get in over her head.
Something Earned is Something Appreciated
Do you think you can teach your teenager that saving her money to buy something she really wants will make it more enjoyable? If you feel confident that you can do this, it will happen. Kids learn by example. If you are off on a buying spree, come home with all your purchases, and try to tell your teenager that she has to save to afford the things she wants, she is not going to believe a word of it.
However, if she sees you put money away each week towards something that you want for the home or for yourself, she will believe that this is a good way to save.
The advantage of good credit far outweighs bad. If you can teach this to your teenager, she will be on the road to a more secure future. Of all the lessons you teach them, this will be one of the most important.