The Real Score On Credit Cards For Teens
Credit plays a big part in life. A good credit rating will allow a person more conveniences than those with a poor credit rating. But when it comes to teenagers, is it really advisable to allow them to handle credit cards?
The pros and cons of allowing a teenager to have a credit card and handle it alone are gathered below for your understanding. But first, you must know a few facts.
Kids are not taught how to handle credit cards for teens in school. Very few schools teach personal finance in their curriculum. This means your kids will either learn to handle their finances through their parents or on their own as they grow up. Some parents say you must not wait until your kids get to college before you say something about how they could handle their finances.
There are some kids who own their own credit card for teens under their own name-by the time they are a senior in high school. Majority of college students own their own credit cards for teens, usually carrying a balance of around $3,000. There is a rise in the number of bankruptcy being filed by people below the age of 25. Most states allow the issue of credit cards for teens to 18 year olds without the need of a parental consent. The Pros
If you are a parent and you would allow your teenage child to own a credit may teach your child financial responsibility at an early age. If you would provide your child proper instruction and guidance on how to handle credit cards for teens correctly, then your kid will be on the right track. Just don't forget to inform your child about the importance of paying balances on time, and the importance of a good credit score. These cards are often handy, especially during emergencies. Teach your kids how to handle a credit card for teens correctly will have your child prepared for the future. Your child will find it less difficult when it the time comes and they have to get their own apartment. A good credit rating will make this possible. They will also allow your child to get better rates when it comes to their insurance coverage and in the future, your kid will not have a hard time buying a home or a car of their own. The cons
The problems arise when the teenagers are not given proper instruction regarding credit card for teens handling. Charging purchases without paying debts on time will hurt these kids financially. Companies often take advantage of teenager's lack of basic knowledge when it comes to savings and budgeting. This results in a lot of unpaid charges, late fees, delinquency records and a hurt credit score at a very young age.
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