Should You Allow Your Teen to Have a Credit Card?
Getting a Credit Card as a Teen Can Help Establish a Good Credit History
If you’re the parent of a teen, you might be wondering if you should allow your teen to have a credit card. Times are certainly much different than when you grew up, and nowadays many teens have credit cards. You’re definitely wise to question whether or not it is a good idea for your teen to have a credit card. The answer may surprise you.
Not All Teens Mature At The Same Rate
Whether or not your teen should have a credit card depends on several factors. You definitely have to consider your teen’s maturity level. At seventeen, teens are very different from one another. Many tend to be impulsive, which is often unavoidable at this age. However, some teens have a remarkable degree of maturity that surpasses their peers. If your teen falls into the later category, you might want to consider opening a joint credit card with them.
Draw Some Lines
If you do decide to allow your teen to have a credit card, you definitely need to establish ground rules from the beginning. Let your teen know under what circumstances he or she would be allowed to use the credit card. Perhaps, if your teen is out on the weekend and encounters an emergency situation, you will allow your teen to use it. A credit card can definitely be very beneficial if your teen is faced with an emergency situation. However, make sure your teen knows that impromptu sprees at the mall will not be tolerated and will result in significant consequences.
No Surprises
You should establish consequences that your teen will have to pay if he or she uses the credit card in a way that breaks your agreement. For example, you could suspend you teen’s credit card privileges for one month as well as their phone privileges, dating privileges, etc. Let your teen know that you would expect to be paid back for any charges you didn’t previously approve and that consequences won’t just be severe, they’ll be enforced.
Protect Your Teen’s Credit
If you put your teen’s name on your credit card, you definitely need to make sure you are not late with payments as it will affect your teen’s credit rating. Assuming you aren’t forgetful and are diligent about making payments, allowing your teen to have a credit card can be a great way to help him or her build a solid credit history, and a solid credit history is vital to your child’s financial future.