Although they're convenient to use, credit cards cause more problems for a person than cash ever could. After all when it comes to hard currency you can't spend it if you don't have it. Plastic on the other hand doesn't care that you can't pay for something when you buy it. You can take it home with you and use it until you do. This is why there is so much credit card debt in America today. This is also why teens should be allowed to have credit cards.
For those of you scratching your heads at this apparently illogical conclusion, think about it. Yes, for the most part teens are not that responsible when it comes to money. Yes, they buy the newest and most expensive clothes and gadgets and become bored with these trends in no time. And yes, they will go to great lengths to convince you to buy these things for them.
But if all else fails and they can't get what they want, rest assured they will work their tails off to earn the money. Whether it's an allowance or a paycheck it's not usually that much, making them all the more impatient to grow up and be given a credit card. After years of paying for things with cash, the instant they receive credit they run wild. This normally happens during freshman year of college. They're finally out of the house and living on their own, but are they making the right spending decisions? Probably not. Is it any wonder then why students graduate with not only hefty student loans to pay back, but also credit card debt to pay off?
This is why it's important for them to learn about credit from a young age. After all, their spending activities are under your direct supervision and there are plenty of opportunities to teach them how to use credit cards responsibly.
Start off with a debit card to make the transition from paying only in cash easier. Many of these programs give parents the option to be notified when the card has been used. Make sure they understand once there is no more money left in the account it's gone until the next deposit is made. They'll likely think twice about what they buy to avoid the embarrassment of being denied their transaction in front of others.
If teens prove they can handle the responsibility of a debit card, then add them on to one of your own credit cards. This ensures their activities are still monitored closely since mistakes on this level are more difficult to reverse than with a debit card. When the statement arrives, explain to them the various sections of fine print so they're aware of what they're agreeing to and what's expected of them. Little by little they'll be more confident and smart as consumers when they open cards of their own.
Just because you're old enough to start doing certain things you weren't allowed previously doesn't mean you're prepared to do so. That's why it's actually a good thing for teens to have credit cards. By starting young, they'll learn how credit works, and they'll be less likely to incur high levels of debt, something even us adults still do quite frequently.