Should you get your teen a credit card?
Ahhh the teen years- as your child struggles to eke out their independence and as you struggle to keep your sanity. The lessons that are learned during these important years are ones that will resonate and stick with your kids as they become adults. That’s why you’ve got to take advantage.
And there are few more important life skills to impart than good money management. So, wouldn’t it make sense to get your teen a credit card? Well- yes, but with a whole lot of conditions attached- for both of you.
Walk before you run
Does your teen have their own bank account that they’ve been responsible for? Do they understand how to balance their chequebook? You may want to tackle these lessons before you head into credit card territory.
Some serious ground rules
The real goal here is for your teen to connect the dots between spending and paying for said spending. Help them set up a budget, in which you can allocate together a set amount that is reasonable to be spent on the card (think shopping for small items, gas and entertainment). And non-negotiable? Your teen must cover all or part of these expenses, depending on part-time jobs, savings, etc.
Approach these expenses as though they were cash, with the idea that the card is paid off in full every month.
Take advantage of teachable moments
Every action (or inaction as the case may be) has consequences. Make sure that your teen is connecting the dots between spending behaviour and a solid credit report. Also make sure they understand the implications of abusing credit that can last for years and years into adulthood.
Even if your kid isn’t a math whiz, run through some scenarios where interest accumulates. They will quickly see how a small sum becomes a big sum.
Play it safe
No time like the present to learn about identity theft. Make sure your teen keeps their PIN secret, and caution them about spending online. You will want to vet any sites they are frequenting.