What to Teach Your Children about Credit Cards

Because of the many changes on how purchases are made, more and more parents are allowing their teenagers to own credit cards. Credit cards are not all that bad. Their proper use can train teenagers to be financially responsible. However, their proper use may not come that easily among teenagers. Therefore, you must guide them in doing so. Here are a few tips on how you can guide them.

Avoid peer pressure – Is your teenager pressured to have a credit card because her friends all have one? If peer pressure is her main motivation, stop her from getting a credit card. She's most likely to use it to the max because of peer pressure too. Before she knows it, she's already in big trouble.

Treat credit card as cash – Tell your teenager that this plastic card is as good as cash. So, she must be wise in spending it or else she can end up in a pit of debt.

Co-sign the credit card application – This is already required by the law especially among applicants who under the age of 18. This will tie her credit record to yours. You can her monitor her spending this way and advise her how to improve her credit card spending.

Set rules – Will you allow your child to use credit card for all her purchases? Let her know what kind of purchases can be made with the credit card. Give her cash to spend on other items that she needs. Tell her to strictly use the card only for emergency situations.

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