Teens and Credit Cards: An Alternative View
by Patricia Chadwick
Spending, Saving, and Earning Tips for Teens
Your Teens and Money
Many people have trouble with over-spending, especially when it comes to using a credit card. We live in a fast-paced society where we want what we want when we want it. We don't like to wait. While our parents gained their assets over a lifetime, our generation seems to want it all now! Because of this, many people have become overwhelmed with credit card debt.
Credit cards in themselves are not evil, but they can hold for us a temptation to spend more money than we have. While we need to be careful how we use them, there are many practical uses for credit cards in today's society. There are times when using a credit card is the quickest and easiest way to make a purchase. Online purchases can many times only be made with the use of a credit card. It also helps to establish credit which helps when we need to seek a bank loan.
Though some disagree, I firmly believe that we should train our children in the correct use of credit cards starting in their teenage years. If they learn the correct use of credit cards now, they won't have to learn hard lessons as young adults who have gotten themselves overwhelmingly in debt.
When my children were young teens, I requested to have a credit card issued from my own account with their name on it. I kept the card in my files and gave them distinct instructions. They were to use the credit card only to buy things that they had money for and they had a $100 limit. I was very careful to watch how they used the card. When the bill came in, I showed it to my kids and they needed to pay me for their purchases immediately. This worked out very well, except for one time. My daughter had the money before she purchased items with her credit card, but by time the bill came in, she had spent her money. I explained to her how a credit card works. Yes, she could make a minimum payment, but she'd have to pay interest. And interest adds up. While I paid the bill that month, I made up a payment schedule for her, including interest. She was not allowed to use the credit card again until she paid off her bill. It took her almost 2 months to pay off a $50 bill, but it was a lesson she will never forget. I asked her what she learned from that experience and she said she learned two things:
- Put the money she charged in an envelope marked "Charge Card" so she wouldn't spend the money saved to pay off the bill.
- Never charge more merchandise than you have money coming in. If you do, you end up paying a lot more for the things you bought.
As my older teens have moved up to high school and have jobs of their own, I have encouraged them to get a credit card of their own to establish their credit. I have helped them fill out the forms and requested a credit card limit of no more than $300. I still keep a careful eye on how they are using the credit cards, but since the bill comes in their name, I give them more freedom on when and how they use it. So far, I haven't been disappointed.
Though not everyone will agree with me regarding the issue of teenagers using credit cards, I am convinced that the lessons that they will learn on the wise use of credit under my watchful eye will save them learning from more serious mistakes in adulthood that can come from not knowing how to use credit cards prudently.
Patricia Chadwick is a freelance writer and has been a stay-at-home mom for 16 years. She is currently a columnist in several online publications as well as editor of two newsletters. Parents & Teens is a twice-monthly newsletter geared to help parents connect with their teens. Subscribe at parentsandteens.com. History's Women is weekly online magazine highlighting the extraordinary achievements of women. Subscribe at historyswomen.com/subscribe.html.