Credit Cards for Teenagers

I recently read a news article about credit cards that are marketed directly at teenagers.  I will admit to having been shocked at first, teenagers do not exactly strike me as being the ideal market for credit cards, not many teens make much money, if any at all.

It definitely got me thinking though, can credit cards be a useful tool for teenagers, or is just trouble waiting to happen?

One thing seems clear to me, a lot of how a teen is going to handle money is going to come from home and whether they have had the chance to learn about money management, savings or even simply learning the value of working for low wages. Some teens probably would be very good with their credit cards, if their parents taught them to always pay the bill in full and immediately upon receipt. And some kids would hand the bill over to mom and dad for payment and learn that plastic money means “free” stuff whenever they want. Either way, it is as much about the general family financial outlook as it is about the credit cards themselves.

Then I decided to do some reading on the topic and one of the first posts I came across was from Frugal Dad and it was perfect! I love when a blog post can help me verbalize the thoughts percolating in my mind. Normalizing the use of plastic too early is almost certainly a bad idea for the majority of kids. Having cash in your hands is very different from thinking you need to pay the bill “later”, whenever that mythical later might be. My son just got paid $20 for taking care of my neighbours cats/plants for a few days and he immediately wanted to put it away and keep it safe, because he hasn’t had a $20 bill of his very own ever before. Normally when he gets monetary gifts they are small or immediately deposited to his savings account. That cash is REAL to him, and that is worth a lot.

I definitely do not see myself co-signing to allow my teens use of a credit card. We’ll talk a lot about credit cards and what they mean, probably I’ll even show them my bills when they are teens so they understand about how it adds up, what interest is and how you must pay for things you buy no matter how they are purchased. But I’m not going to risk my credit by letting them have access to an account I have to sign responsibility for.
What’s your take? Will you or do you let your teens have access to a credit card? Do you think it might be a useful tool for teaching or simply a dangerous proposition?

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3. Swiss Army Greeting Cards Review
4. Teenagers Favorite Clothing Stores
5. Mothers Day Cards with a Difference