How to Teach Teens About Credit Cards

What you teach your child during his teen years about credit cards will help better prepare him for his future. Your teen needs to know how a credit card can affect his credit, which is a key factor in many aspects of adulthood. He needs to know that having a credit card is not a pass for a "free shopping spree." Once you are confident that your teen knows how to use a credit card wisely, you may decide to get him a real student credit card of his own.

Instructions

1

Advise your teen that a credit card requires a great amount of responsibility. Educate her about the consequences of using a credit card irresponsibly. For instance, tell her damaged credit can prevent her from getting future credit and a house. It can also prevent her from securing employment.

2

Advise your teen that the money he spends with the credit card has to be paid back. Educate him to only use the card if he can pay for the purchase in full, when he receives his next credit card bill.

3

Advise your teen to protect her credit card from others. She should not allow friends to use her credit card or have access to her credit card number. She should not use her credit card to impress friends.

4

Teach your teen not to "max out" his credit card. Only charge items that are absolutely necessary. Save the credit card for emergency use. Make your teen aware of the fact that a high credit card balance can negatively impact his credit.

5

Teach your teen about the importance of paying the credit card bill before the due date and that late payments will damage his credit. Advise him to always make more than the minimum monthly payment so that the debt can be reduced faster.

6

Get your teen a "mock credit card" in her name. By doing so, you can monitor her usage and spending behavior to ensure she is using the card wisely. You can act as the creditor, by funding her card with "credit." She can use her allowance to pay you back for the money she spends on the card. A few companies that offer these types of cards are PayJr, MyPlash and UpSide.