Teen Credit Cards; Good or Bad Debt Training

By: Mike Parker
Submitted: 2007-01-17 16:11:14
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Are teen credit cards a good or bad idea? You will have to decide for yourself. They can either teach your child responsible spending habits or they can teach them that having a plastic card means getting what they want when they want it. A"teen credit card" is not a real credit card. It's really just a type of debit card that you purchase from the credit card companys. The only money that can be spent is what you put on the card when you buy it. There is a fee charged by the credit card company, but it is usually less than the fee for a real credit card.

There are some good points that can be learned from having the credit card. Your child can learn to manage their money by tracking how it is spent.Having the credit card can teach the holder about budgeting, general finances, and good money management. The amount put on the card is limited and monitored by both the credit card company and the parents.

There can also be some negative points to having the credit card. These cards are treated just like adult cards. This means that teens can go online and order what they want without your knowledge or approval. With credit card debt being one of the leading causes of bankruptcy and debt consolidation, the good may not be enough to offset the bad that can result.

It is a lot more convenient to carry around a plastic card than cash or checks. The teen may become accustomed to pulling out their card without a second thought. After all, if the card is already out of money, then the purchase will simply be declined. The problem here is that when they are older and have real credit cards, the card limit may be way above what they can actually afford. They usually realize this when the bill comes in. This is when you, the parents, will probably be receiving a phone call or E-Mail from your "loving" children asking about your financial situation. Hello Bankruptcy!!

But seriously, giving a teen a credit card (real or otherwise) is something that should be given serious thought. You know your child better than anyone else. Are they mature and responsible enough to handle it properly? Will they gain some valuable knowledge about real finances or become another one of the millions that are struggling with overwhelming credit card debt. That is something that you cannot know for sure. All you can do is teach them the best you can, then hope and pray for the best. Good luck!!!

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