If you have a teenager, the thought of giving him or her
free reign with a credit card probably scares you half to death. In truth,
though, your teen is probably going to be spending less time at home with you
and more time out with friends in the years to come. As such, it’s just plain
smart to give your kid some kind of “plastic” for easy spending. Furthermore,
since most people have credit cards later in life, this is the perfect time to
teach your teen about responsibility and money management. Before you just go
out and sign your teenager up for a credit card, however, you’ll want to
consider all the different options so that you can make the best choice for
your child.
The Authorized User Option
One choice you have is to simply add your child as an authorized
user to your own credit card account. Depending on your credit card company,
you may be able to do this just by requesting it. The worst you’d have to do is
fill out a simple form. Your child will receive his own version of your card,
allowing you to view itemized statements of every dollar he or she spends. Just
keep in mind that whatever your credit limits are, the same limits apply to
your teen, so if your teenager wants to spend a fortune, he easily can! As
such, make sure that you can trust your teenager and that he or she is
responsible. Explain what might happen if your credit becomes damaged, both in
terms of how it would affect your life and what the consequences would be for
the teen offender. Even if you feel you can trust your teen with the card,
check statements as soon as they come and discuss any poor spending habits or
undisclosed spending!
A Personal Card
If you truly trust your teen or if you just don’t want to
put yourself at risk, you can help your teen to get his or her own credit card.
This option, in most cases, is only available for teens who are legally adults.
If your son or daughter fits the bill, however, you can help him or her to
select and apply for the right card. This is the perfect time to teach your
teen about building credit, and, if all goes well, to get him started off right
in life! If things don’t go well, then there’s a lesson in that too, so don’t
be afraid to let your teen make a small mistake here or there.
A Bank Account and Debit Card
If you and/or your teen aren’t quite ready to deal with real
credit cards just yet, why not have your child open up a bank account? Even if
he or she is a minor, you can help; in fact, many banks even offer free or
low-cost accounts to teens. If you link your teen’s account to yours, you’ll be
able to transfer funds automatically, which is a nice plus. It’s recommended
that you turn on overdraft protection, if your bank offers it, so that, if your
teen is a poor money-tracker, he doesn’t end up owning lots of money in those
costly overdraft charges. Of course, if you want to give your child a dose of
reality, you can skip the overdraft protection. In either case, a bank account
is a great pre-cursor to a credit card.
As a parent, you know your child better than anybody, and
you know what will and won’t work for where he or she is in life. Give it some
thought, talk the issue over with your teen, and then make a decision. With
your guidance and input, your teen is sure to do great, no matter which
“plastic” option you decide on.
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