2 of 61

Yes

Write now Article Tools

Recent surveys show that over eighty percent of graduating seniors not only have credit cards, but have credit card debt. Moreover, on average, approximately twenty percent of bankruptcy filings each year are made by college students. Clearly, teens and college students are having trouble managing their finances and their credit. However, does this mean that teens should not be able to secure credit cards? No, quite the opposite. It means teens need more support in developing responsible financial habits. Credit is a fact of life and an important part of that development.

Parents should assist their teens in establishing credit early, while they can still exert parental influence (both legally and paternally) over their teens. Doing so provides enough time to influence your teen's behavior so that they develop positive financial habits. When they are young, parents should give their teens modest spending limits, help them develop a budget, teach them the value of work (and so they can earn a modest income or allowance), and regularly monitor the child's efforts in keeping on tract with those limits, responsibilities and goals. There should be rewards for success and penalties for failure. Learning the consequences of good and bad financial management early is one of the most important skills we can hand down to our children.

In addition, teens need to see their parents handling their credit appropriately. They need role models. Sure, there will be times when mistakes will be made (e.g. a missed payment), but older teens still need to see them so they understand the realities of credit so that they can make smart choices about whether, when, and how to go into debt. If the understand how and why their parents are struggling, they will have a much better understanding of the importance of their decision. By protecting our teens now (and here I mean older teens) from the reality of credit, we doom them to a high probability of failure later (just ask the approximately 90,000 college students who will file for bankruptcy this year).

Prohibiting teens from obtaining credit cards ignores the reality that they will eventually obtain them when they reach the proscribed age, but will not have developed the maturity and skills with which to properly manage their new financial freedom. Just like the drinking age, they will go through a period of credit binge that will have long term impacts on their finances and credit worthiness, as well as all the indirect impacts debt has on one's life (e.g. stress and depression).

We need to accept the reality that credit is an important part of our consumer culture. So much so, that teens need to learn to work within that culture successfully at the earliest age possible. By doing so, they will develop positive habits that will help them avoid the pitfalls affecting the overwhelming majority of young adults today. Thus, teens should be able to obtain credit cards, and parents need to accept and embrace the responsibility of showing their teens how to use credit properly.

Learn more about this author, Joseph Hazelbaker.
Click here to send this author comments or questions.

Add your voice

Know something about Should teens have credit cards??
We want to hear your view. Write now!