Credit cards are a quick means of accessing a small amount of credit at the cost of a high interest rate. Although the ease of obtaining credit cards helps individuals establish credit and gives them a chance to learn how to be responsible with credit, low payment options and heavy fees lead irresponsible credit card holders to indebt themselves into a cycle that allows a credit card issuer to enjoy a perpetual balance at the expense of ruining the individual’s credit. Even though a huge number of people can obtain credit cards, whether or not they have an income to support that credit, only a certain number should have them. When considering whether or not a teen should have a credit card, parents must ensure their teen is or can become the kind of individual who will responsibly use a credit card.
There a number of reasons why parents allow their kids to have credit cards. Sometimes it is to provide them with emergency funds or allow them the opportunity to learn how to be financially responsible. Moreover, adolescence is a perfect time for parents to educate their children on the reality of finances before they depart from the nest and must make financial decisions on their own. Once a child reaches the age of eighteen, parents lose much of their authority over their child, and thus, the opportunity to instill responsible behavior. Before adulthood, parents act as guides who can positively shape a teen’s behavior, so he or she makes healthy, responsible decisions.
All people need to understand what credit is and how to use it responsibly, but parents can educate their teens by exposing them to a limited amount of credit while they have the power to censor their children’s purchases, thus, credit cards are a powerful tool for teaching a adolescent financial responsible. As for those teenagers who are already financially responsible, parents mostly need to monitor their spending habits to ensure they are in deed responsible. For those teenagers who are not, parents must use the credit card as a tool to teach.
The most important aspect in giving a teen a credit card is the education of the teens and the parents; this means parents and child need to reinforce the idea of a credit card and what the consequences of misusing it are. Education must be put into action by training teens to understand when it is appropriate to use a credit card. Furthermore, parents should not necessarily limit credit card use to an emergency as everyday spending offers opportunities to learn how to balance a limited budget and use credit cards responsibly. Moreover, training a teen must involve consequences that financially punish them by burdening their limited budget with the debt they assume with their credit card. If a young adult does end up maxing out his or her credit card, the credit card should be immediately taken away until the debt is paid off as the consequences for overspending are the most important aspect of the learning experience.
Above all, it is always wise to fully educate a teen on financial matters and sometimes this involves expanding the parents’ understanding, but credit cards should be an experiment reserved for teens who are financially responsible or are prepared to become financial responsible. It is the parents’ responsibility to constantly monitor the finances of their children to ensure they are properly learning to financially responsible. On the other hand, credit cards are not necessarily the best tool to start a child’s financial education. Parents need to involve teens in the family’s finances before the idea of credit cards is introduced and demonstrate what it takes to be financially responsible.
Moreover, if a teen cannot handle a credit card, they will likely encounter struggle with their finances as they head into adulthood where parents lose their chance to properly educate their children. It is the responsibility of parents to prepare their children for the burdens of adulthood before they reach that stage. Credit cards should not be feared; they should be embraced as a financial tool that can be used responsibly to benefit the credit card holder.