There is no hard and fast rule on when you should introduce your child to the wonderful world of plastic money. Only you know how well your own child will respond to the creative possibilities of buying on credit, but as a rule of thumb, most money experts think you should wait until his or her late teens.
Our oldest daughter applied for her first credit card just before her sophomore year in college. By that point, she had been living on her own for a year and sticking to her budget, so we felt confident that she would handle the new financial obligation with care and seriousness.
That didn’t, however, prevent me from offering some fatherly advice. After all, I’ve had my own credit cards for decades and I think that I’m pretty much an expert. So let me pass on some of my parenting wisdom in the hopes that you will find it valuable when dealing with your own teenage consumer clamoring to enter the credit card arena.
The first thing I told my daughter was not to lose or misplace the card — ever. Regardless of the fraud prevention embedded in most modern credit card accounts, the unauthorized use of her card would certainly cause her all sorts of unwanted hassles, including identity theft. And nothing brings on an undesirable adrenalin rush like noticing that, a week ago, you bought a $500 dinner in a city you never visited. Report a lost or stolen card immediately.
Next, I suggested she use the card sparingly, at least several times a month for purchases she knew she could afford – even if she had the cash. With an online payment account set up through her credit union at school, she would then be able to pay off the entire balance every month and do it at least a week before the due date on her statement.
By using the card only from time to time and paying if off regularly, she would carefully and continually build a good credit history. Now, of course, card issuers hate it when someone keeps an account current because then they don’t make any money on interest or late fees. So in order to make up for the loss, they start offering of all sorts of add-ons and unnecessary programs to tempt the unsuspecting.
Stay away from credit cards. Nobody really needs them. In fact, many of the major credit card issuers have been accused of deceiving their customers into signing up for a whole bunch of useless, fee-based products like payment protection, wallet protection and credit score tracking.
My last piece of advice was to remind her not to hide from me if she couldn’t pay off her balance in a particular month. Whatever embarrassment she might have to suffer by running to her dad for help, it would be less painful than accruing interest payments and late fees. I told her that I have no problem writing her a check – as long as she promises to pay me back from her summer job.
Al Krulick is an award-winning journalist with dozens of years of writing experience. He writes and blogs for Debt.org.
