David Wiser, an accountant in New York City and his wife, Shelly, a psychotherapist, have been married for 23 years. They have a 16-year-old son and a poodle. The Wisers want their son, Conner, to learn to use credit responsibly and to manage his money well. They started his first savings account when he was ten and he adds to it regularly. He also balances a small checking account. Conner will be going off to college in a couple of years and they want to offer him the convenience of his own personal teen cards. However, sticking a card in his hand as he charges out the door toward his hectic college life probably would not work well. The Wisers hope to guide Conner’s use of credit for a couple of years. Many families are in the same position.
Raise Your Hand for a “Yes” Vote
In a recent poll parents were asked if they would allow their teenager to have a credit card. Here is how they voted:
- 24% said yes
- 41% said yes, but one that I can control
- 29% said — No Way
- 5% where unsure
The majority of parents polled were willing to help their teens learn good credit habits with a credit card — if the parent controlled it. Obviously, many parents believe their teenagers are mature enough to accept financial responsibility – with a safety belt.
Establishing a Good Credit History
One of every three high school students has a credit card. If credit is used wisely, these teens will have a positive credit history when they attempt to buy that awesome first car, rent their own space or apply for a job. Employers frequently review at an applicant’s credit history as part of the pre-employment evaluation process.
Limiting Collateral Damage
Let’s face it parents, we all make mistakes. However, credit catastrophes are much less likely if the teen is still at home and must face mom and dad every night. Life becomes complicated when a young adult goes off to college. New situations, relationships and academic demands, not to mention temptations, can be overwhelming for the tenderfoot student. Learning fiscal responsibility, the prudent management of a credit card, should not be thrown into this emotional, social and intellectual jumble.
Teen Cards Available for Adolescents and Young Adults
Debit cards and credit cards are available to adolescents from 13 years of age to a more mature 25 and are called Teen Debit Cards. Naturally, the debit card age requirements are lower, because the cardholder’s parents are loading the account with funds from which debits are withdrawn. This has the convenience of a credit card without the risk of pricey shopping sprees. This is also true with prepaid cards.
Of course, the advantage of a debit card is the low risk involved. One cannot be turned down (thought the parent will probably have to apply), there is no credit check and approval is immediate if one applies online. Teens learn to consider the card a type of checking account with a finite balance which must be considered when considering that sexy new sweater or awe-inspiring sneakers. This is a laudable concept and will serve teens well later when they use a bona fide credit card with sans training wheels. The Payjr Visa Buxx Card and the Allow Master Card are teen debit cards. The Upside Visa Prepaid card is a reloadable prepaid teen card.
Low Balance Credit Cards
Parents will co-sign with their teen offspring for a low balance credit card. The limit will normally be under $1000, frequently much lower, in the $200 to $300 range. This card allows a little more freedom. However, once the limit is reached the bank puts on the financial brakes.
Children learn from their parents. Teen cards are an opportunity for parents to teach their teens the value of a good credit history and how to manage credit. Good decisions are not made by accident they are learned. Involved parents can gently guide their teen in the right direction, before a credit disaster happens.
When you have chosen the appropriate card for your teen, apply on-line with confidence. We care about your security.