A Few Words of Wisdom Regarding Teens and Credit Cards

Consider Giving Them Their Own Card

It may seem illogical to give a teenager their own credit card, but the best way for children to learn something is by practicing. Now, don't go and do something silly, like give a teen a credit card with a high limit. Start with something modest, like a credit card with a $200 limit.

A word to the wise, however. Make your teen put the $200 aside before they begin using the card. This way there's a reserve to pay the balance if a mishap occurs. Don't, however, use that $200 to pay the monthly bills. Make them pay that out of their paychecks and their pockets.

Make sure your child is aware of their spending ability, based on income -- whether that is from an allowance or a job, or merely through the depletion of savings accumulated from years of birthday gifts. Explain to them that they are spending THEIR OWN money, not yours, so they should not expect to be able to spend more with the card than they have the cash to pay off when the bill comes.

Don't Be Afraid To Step In

Above all, stress that having credit cards is a privilege, not a right. They are responsible for spending within their limit (which is imposed both by the limit on the credit card and by you as a parent).

Review the bills with your teen and ensure that the payment is made in full and on time.

Stress to them the importance of guarding their credit cards, and that it is not to be left lying around at any time. And tell them they must never, ever share the cards with a friend.

Most importantly, regularly check your child's credit card via the online account access. This will allow you to monitor their spending and potentially ward off any problems that might be brewing (such as approaching the credit limit).

And, don't be afraid to take it away at any time! If your child isn't handling his or her credit cards properly, they need to know there are consequences because of it. After all, we adults face consequences for improper spending on credit cards too!