1. Safety
   Many parents like the idea of teens having cards that can be used in an emergency. Teens can easily use the cards to get a taxi home or to get help if a car breaks down

2. Convenience
   Teens can use the card anywhere credit cards are used, meaning that they can enjoy the same spending experience as adults.

3. Money Control
   Credit cards leave a paper trail that can help teens - and their parents - review purchases and spending habits. This can help teens learn about budgeting.

4. Learning Tools
   Credit cards designed for teens can be a fairly low-risk way for teens to learn about online banking, credit cards, and money management - tools that will be very handy when they need to do these things on their own and with no parental guidance.

5. Easy to use and apply for
   To apply for a teen card, teenagers need parental consent and some cash to place on the card. Applications are generally approved quite quickly and card transactions can be viewed online, helping teens to manage their accounts via secure web pages.

6. Shopping experiences that mirror real-life expectations
   Most teens today shop over the phone and online. Credit cards allow them to do this rather than to rely on the mall for traditional shopping.

7. Safety features that help control spending and debt
   Most teen cards are stored-value credit cards that work just like phone cards. Parents add money to the cards and teens can spend the money that is on the card. Also, even though credit card theft is a real possibility, teens can always call in a lost or stolen card and so safeguard their money. Cash is far easier to steal.

Helping Your Child Use Plastic Responsibly

• Don't sign your teen up for plastic before they are ready. Your teen should already have had a bank account and an allowance or some regular money for a while before signing up for a credit card. This gives your child or teen some time to learn about money and its management.

• Have a serious financial discussion before applying. Before applying for a credit card with your teen, have a serious discussion about credit cards, responsibility, and money. Remember: credit cards may be simple and obvious to you, but to a teen they may look like free money. Explain the ways that credit cards are responsibilities and explain exactly what will be expected from your teen when he or she has a credit card.

• Set rules for credit card use. Do not simply issue a card to your child. Instead, establish rules for where and when cards can be used. You may wish to set spending limits, for example, and you may want to insist that your child bring you every credit card receipt they get.

• Alert your child to credit card dangers. Many banks and law enforcement agencies will talk to schools or individual teens about credit card frauds and scams. It is crucial that your child stay aware of these dangers, since with a credit card your teen can easily shop online, a place where unscrupulous companies do regularly set up shop.

• Monitor expenses and monthly transactions together. Once a month, go over your teen's spending and discuss how they feel about their purchases. Ask whether your teen wishes he or she had made different buying decisions. If the answer is yes, talk about what your teen can do next month or next week to shop differently. Also, be sure to show your teen how to compare a statement with receipts to look for errors or potential problems

• Be sure your child understands credit. If your teen's card has overdraft protection, your teen can charge slightly more than they have deposited. Even this small amount can quickly turn into debt. Be sure to explain to your teen the dangers of debt and work with your child to find ways to avoid this common credit card pitfall.

Related Articles