Credit cards are the best way to separate the boys from the men. Giving a teenager a credit card is a sure way to test whether he is ready to manage money on his own. At first, giving a credit card to a teen sounds almost as ridiculous as giving a toddler a box of sugar, nothing good can come from this. However, credit cards have been proven to teach responsibility and money management, and when given at a young age children will grow up with these fundamental values in place to lead a brighter and more stable future.
The recommended time to give a child a credit card is in his or her junior year of high school. This timing is due to the idea that when a child enters college there is already enough stress to deal with between school, finding a job, and being away from home that beginning a credit score now would be too much to handle. The best way to start them off is to keep their credit simple, nothing fancy like overdraft protection. They need to learn what it feels like to have a check bounced to understand the reality of how easy it is to spend money that is not available.
Starting off with a credit card should be like having training wheels on a bike, begin with some support instead of just taking off. Set a limit for the credit card by charging up to a cash account held by the bank issuing the card at first. Never throw a kid into the world with an unlimited credit amount to spend, anyone knows that is just asking for trouble. If hoping to change a boy into a man, credit cards will help with that desired separation.
If handing over a credit card to a teenager is about as scary as giving them “the talk” then starting them off as an authorized user for a new account may be a better option. This will give teens the independence they crave yet also allowing parents to hold on to some of the control when it comes to monitoring the spending.
It comes down to the simple idea that teenagers will learn better from experience as opposed to a lecture. Let them make their own mistakes and it will sink in more. It is one thing to lose their parents’ money but when it comes to their own hard earnings, kids are much more frugal. Credit cards encourage kids to get jobs in order to actually have the money to pay off those bills, and jobs are another great way to teach responsibility.
In a world where credit card companies are itching to get their cards into the hands of irresponsible young teenagers, education on how to budget money is vital at a young age. These days it is far too easy to get a bad credit score, especially when a card is in the wrong hands, so make the effort to teach these values now as opposed to paying for it later, plus interest. Go ahead and watch as boys become men when given the responsibility of a credit card, the separation between these two stages is worth the price.
Opinion By Amena S. Chaudhri