Giving Your Teenager a Credit Card
College students and anyone who has just turned 18 are targets for credit card companies looking for new customers, but if your 18-year-old is either still living at home or is financially dependent on you and away at college, then the decision on whether or not they should get a credit card fairly lies more with the parents. A recent post at About’s Financial Planning site had a good discussion about the pros and cons of giving a teenager a credit card, and the end result: usually, the best answer is yes, sign them up.
But of course, there must be rules to go with their new found credit freedom, if parents are the ones who have to foot the bill. For example, it should be used to pay for something that the parents have already agreed to pay for (gas for the car, for example) or only in case of emergency.
One of the biggest benefits of getting your 18-year-old a credit card is that they can begin to develop some credit history. Length of credit is an important factor in calculating credit scores so if they are able to use a credit card without creating debt from a young age, that stands them in good stead. But the key thing is that they should treat the card as a bill that must be paid off in full at the end of every month.
This entry was posted on Sunday, February 22nd, 2009 at 4:53 am and is filed under Kids and Family. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
