Would you ever give your teenager a credit card? If you would, would you set certain rules and limitations on the credit card? My parents got me a credit card the summer before I went to college. My very first purchase was my laptop computer, printer, and a bunch of other school related supplies that my parents pre-approved. We are still paying all of it off, over a year later. It's no fun!
I think the situation differs for each person and what they need. You used your credit card for 'positive debt' in that you can use those items to increase your income now and in the future...so in that way, I think your parents assisted you in getting to know and use debt properly in the right way. Not all people are responsible with debt though. Most teens will not be able to handle it but perhaps it is a good thing if you are introduced to it by people you trust within a safe environment. I would definitely want to educate my kids on all kinds of finances as young as possible. It is all about how you use them, I feel. But yeah...paying it off sucks. (-:
I do not think that is what your credit card was made for. Getting stuck in loans is definitely an unfavourable position to be in. Have you tried contacting your bank and looking for alternative methods of payment to pay it off faster? My parents never gave me a credit card, and I had to apply for this on myself. I work really hard to make sure that I never go over the limit, and always pay on time every month.
My parents are against giving me credit cards. Not because they don't trust me, but a debit card is much more convenient and risk free. Even I agreed with them. I have my own bank account with savings and I have a debit card to use for mostly online shopping. There's a limit to the expenditure per month which I can personally spend to make sure I don't overspend. Teens with credit cards have the tendency to end up in a bad position. It does happen, and I feel it's best to avoid it as much as possible.
I would never encourage my sons or daughters to get a credit card - no matter what age. I had a really bad experience with them as a naive 18-year old and I think they are often more trouble than they are worth. However, I do understand it is important to establish some kind of credit history in this day and age, so if any of my kids decided to get a credit card I could only advise them to stick to a low limit and make sure they pay the entire balance each month.
Though they come in handy in cases where soft loan is urgently needed, Credit Cards are not without disadvantages. First, they promote impulse purchase and thus leave one in unnecessary debt. Also some are very expensive to service, more so if interest rates are increased. I wouldn't mind putting restrictions on what a teenager may purchase with the credit card therefore.
I really wish that my parents had given me a credit card when I was in my teens. I'm currently out of college and still have never had one, which means that my credit is nonexistent. I think, with appropriate supervision, a credit card is a really useful tool to teach financial responsiblity. The supervision part is key, though. Many teens aren't capable of understanding the long-term ramifications of having to pay back credit card debt and accrued interest. I vote to give responsible teens credit cards to build credit, but have them use it like a debit card for minor purchases and pay it off every month.
We just got our 19 year old daughter a card so she can start building up some credit. We of course are going to watch what she is doing with this card closely. I got caught up in some car repairs when I was her age with a cc and had to get bailed out or helped my dad. Since then I have been rock solid in paying my bills on time. Maybe she gets one pass too from me.
I think that everything depends on the child. If you have a child who has shown himselfherself to be responsible and/or able to support themselves financially, then I would steer them toward a secured card product. The card would allow them to qualify with a limited/no credit history and build their credit profile without requiring you as a co-signer. After a period of time passes, your teen will be able to qualify for other products on their own merits. If your child does not exhibit the capacity to be responsible with his/her spending, then I would not recommend any card, other than a prepaid card...that way you can control spending based on total amount.
When I got my first credit card, my dad told me to always follow this rule: Only buy with a credit card if you can already afford it with cash. It makes a lot of sense, because by being able to pay off the statements sooner rather than later, you are saving yourself from dealing with those horrible insurance rates. It also allows you to build your credit score over time, which could be a big help in the future. So to answer your question, I believe that giving a teenager a credit card is only smart if you properly educate them about it first.
I think I would likely not give a younger teenager a credit card while I might consider it for someone who is 18 or 19. I would consider the younger teenager still at an age where they need to learn the value of a dollar outside of its mathematical meaning. I believe that teenagers need to work, they need to realize that money will only get them so much for how much they do. I think that credit cards may confuse that fact. For an 18 or 19 year old I want them to learn that if they use it, then they need to pay for it within the 4 weeks they may have before interest is charged on them. Using CC's as a tool is okay but as a crutch is not.
When I was a teenager I made the mistake of getting a credit card and I screwed it up pretty badly. Now that I'm a mother and my kids are getting older, we've taught our kids to not depend on credit (or as we explain it to them, money that we don't have at the moment). I think getting kids started with credit before they really know how to budget is a terrible idea.
