Teens with Credit Cards: A Good Idea?

The thought of a teenager with a thousand dollar credit limit and easy access to a shopping mall is enough to give most parents the willies. But it’s more common than you’d think. According to recent studies, approximately 8% of all American teens now have their own credit cards in their own names. Is this a good thing? That depends on how well-educated the teens are about credit card use - and debt.
Having a credit card at a young age can nurture a good credit score early. Misuse of the card can also lead to poor credit early in life. If you’re a parent of a card-holding teen, make sure they know that credit cards are intended for emergencies. Or set a spending limit of your own, and encourage them to pay off their balance each month to avoid revolving debt and interest.
If you’re worried about your teen’s spending habits, but want to teach them to be responsible card holders, think about getting them a prepaid credit card. That way, you can decide how much they can spend. You can also co-sign for a card and set up online account access so that you can monitor all charges.
Credit cards are definitely a part of today’s society, so teaching kids to use them right is a good thing. Set an example by using your own cards wisely and encouraging your teens to do the same.