Your Kids And Your Credit Card: Not A Good Combination!
Should You Let Your Kids Use Your Credit Card?
As teenagers become increasingly independent, it may seem appealing to encourage their independence and mobility by making them authorized users on your credit card. For kids with a limited sense of financial responsibility and an inherent tendency to give into peer pressure, however, the temptation of seemingly limitless buying power can forge an ugly battleground. If you are considering letting your kids use your credit cards, there are some things to consider.
From The Gas Pump To The Mall
If your teen has access to a vehicle, it probably seems to make sense to give them one of your credit cards to make it easier for them to buy gasoline. Assuming your child is not the type to drive excessively, you would not expect to open your credit card bill and see anything you didn't expect.
Despite giving your teen strict spending guidelines, however, you cannot necessarily expect them to reject peer pressure or the pull of new clothes or gadgets, which teens tend to view as an indication of their social status.
Give a teenager unfettered access to a credit card with a high limit (which most family credit cards have), and you may end up with hundreds, if not thousands, of dollars worth of teen-purchased merchandise.
Teach Financial Responsibility
If you are still leaning towards giving your teenager a credit card, consider opening an account specifically for their use with a manageable limit that is forgiving in the event that your child exhibits less than sound judgment.
A credit card with a limit of only a few hundred dollars will probably not break your budget if it is maxed out, but it will give you a good starting point for teaching your teen about financial responsibility and money management.
Then, if your child does spend irresponsibly, you can simply take away the privilege of using the credit card until they have paid the bill and have demonstrated that they have learned a valuable lesson.
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