by Gary Iverson

Created on: May 10, 2009

Teens should have credit cards if the following events take place:

1. They become financially literate

2. They have a part-time job

3. They are able to pay off their debts each month, every month

If these events come to pass, then teens should be allowed to use credit cards. This is similar to the Graduated Driver's License Program; teens must complete a classroom course with behind the wheel training, many hours driving with their parents or guardians, and a final test before receiving their License. A credit card should be earned. Therefore, teens must first take a financial literacy course or read a book on the subject, be tested on it, and monitored while using it for the first year or so. This should allow teenagers to develop the level of maturity and responsibility necessary to use the credit cards effectively. In this way, we may help to avoid another recession like the one we are currently in the midst of. An excellent financial literacy book is Chad Foster's Financial Literacy for Teens; it covers Credit Card debt, the differences between needs and wants, insurance, saving, taxes, Internet scams, and investing in an easy to read, concise manner that caters to the shortened attention spans of our nation's youth.

Why do teens need to learn these things? Because no one teaches us. According to a USA Today article from 2006, which is still relatively recent, on average, high school seniors answered 52.4% of a 30 question financial survey correctly. Surprisingly, students who had taken a Consumer Economics class performed worse on the quiz than those who had not... (I wonder if Consumer Economics classes are still as I remember them - we played Monopoly for six weeks.) It appears that students who are from families that make over $80,000 are slightly more financially literate than those who make less than $20,000. Nevertheless, these numbers are frightening. These are the young men and women that will be in command of our economy in the near future, and, as I find myself among them, I can only hope that others are as prepared as I am. Alas, this hope fades into nothingness before my eyes. I have seen students graduate over the last few years that are unfamiliar with the concept of time zones, let alone being capable of financial responsibility. I am not fabricating this - these teens are real people with names; they played the Stock Market Game, yet ended up no better off than their counterparts who had not. I am afraid of the future.

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