by Mooky

Created on: July 19, 2007   Last Updated: May 22, 2011

As a teen, I'm sure I would have avidly agreed with the prospect of getting a credit card. To youngsters, credit cars are associated with 'freedom' and 'independence' and it's hard for them to grasp the concept of exactly what 'credit' is. To many, teenagers with the itch for a credit card is like a nightmare waiting to happen but people don't realize that in order to learn life's lessons you have to take a little risk.

I'm a little older, even though the years between then and now aren't many, and I think that if teenagers are given credit cards with very strict rules on its use then it can be a way to really teach them how to manage money. When you're still rather young, work full-time, and are suddenly given a monetary lifeline of $500 it can be a little overwhelming and confusing. You know you have to pay it back but you've never done it before and there are so many rules that it's a little unnerving to even thing about using it. I think that if I had been exposed to a credit card a little earlier in life it would have better prepared me for using it later. Also, a credit card gives you a chance to build up your credit which can be very helpful if your teenager has to eventually take out student loans in their name.

Having a credit card can even teach you how to own up for your mistakes and take financial responsibility. If you do decide to cosign for a credit card for you teen make sure they know what percentage they have to pay back for what they've borrowed and the consequences of not paying it back, including collection agencies and even legal action. When they are old enough let them take the reigns by themselves.

But, the main thing is for parents to realize if their child can or cannot handle such responsibility. If your child is the kind that would go out and spend $200 without even a second thought as to how they would pay it back then you should realize that a credit card is not for them. If your child is the kind of person who would seriously think about the pros and cons of using their card before they make purchases then I'd say give it a try. Also, you have to think about how they're going to pay the money back. If they receive a large enough allowance or have a part-time job that pays enough that they can pay back the charges on their account then it's a good idea. When they do receive their allowance or their paycheck make sure you sit down with them and discuss how much is due, their minimum amount due, and just how much they want to pay on their account. Also, don't increase their credit limit until you and your teen feel comfortable with doing so. Suddenly having more money to throw around can be a little overwhelming and increasing credit limits easily get a lot of people in trouble.

If they don't receive an allowance, don't pitch in or make good enough grades to deserve one, don't have and don't plan on getting a part-time job, or if a part-time job is not an option for them then obviously they're not going to be able to pay for their charges. Who, then, will be left to handle the balances? Your, their parents, will.

But, it all amounts up to trust. If you think your child is trustworthy enough then introduce them to the wonders and perils of credit and help them a little along the way. Of course there are things that can go wrong but there are things that always go wrong in life. You just have to take a chance.

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