[R1up0n1]

A. Teaching kids about finances is an important part of being a parent. They need to learn about savings accounts, credit and debit cards, stocks and bonds, insurance, and interest rates. Yet to hand your teenager a credit card without any instruction about how to use it responsibly would be irresponsible parenting.

Kids today receive in the mail all kinds of offers for credit cards. Yet most of these kids have no income. Credit card companies prey on their immaturity coupled with some parents' unwillingness to say "no" and mean it.


Consider these scenarios when you're considering allowing a credit card:


Does he have a job?
How will he pay it off?
Will you be paying the balance every month?
Does he understand about the interest he'll be charged if he doesn't pay it off every month?

Use Plastic Safely

The last thing you want him to do is to get into trouble with credit card debt, so it's probably better to get him a debit card. If you give him an allowance or if he has a job, he can put the cash in the bank and use his debit card to make purchases without paying any interest. He can learn to check his balance and even learn to do some budgeting.

If he really wants a credit card, talk with him about his spending limits, and what he would end up paying in interest if he doesn't pay off the bill every month. Since he's less than 18 years old, you'll be responsible if his credit card adventure goes awry.

Lessons and Dangers

A credit card could be a good financial teaching tool, particularly if you've been a good financial role model. He can learn the importance of establishing good credit. On the other hand, a bad situation could unfold if he sees how easy it is to acquire one, uses it to his financial limit, pays the minimum amount each month, and then applies for another one.

Proceed with caution. The parenting bottom line revolves around your son's level of maturity, how you'll handle any misuse of the card, and what your son learns from the consequences of his actions. He could become more responsible or less from an early credit card fiasco.

An important point to keep in mind is that today a credit or debit card symbolizes a rite of passage in our culture. Along with a driver's license, it's a sign of being grown up among the teen set. To deny him might cause rebellion in another area. Your safest bet for now would be to allow a debit card. With it he's using plastic but it's guarded with each purchase: he can't overspend or overdraw his bank account.

Source: http://lifestyle.msn.com/FamilyandP...ArticleBHG.aspx?cp-documentid=193622&GT1=7538

 

[JK_DILLA]

i learned about finances the easy way, i worked for everything i had/have. Employed since i was 14.

 

[R1up0n1]

Yuh, well my dad got me my first credit card right before I went to college. I learned the hard way over time thru college.

 

[Trip]

8 months before they graduate high school, so they have credit established well before they end college. I made the mistake off of living off my wages since they were substantial enough to live more than paycheck to paycheck, but actually have a comfortable life without needing credit. The only problem was when I got out of college and wanted to buy some things on credit, I had none established which is actually worse than bad credit. I got a cosigner to help me get a loan to buy a motorcycle I could easily payoff at time of purchase, but had to establish myself for house loans and other things that require credit. My parents always told me beware of credit cards and never get one, but they actually set me up to have massive problems on little details I should of been well prepared for. After my experience with having no credit, I will make sure my kid has a great credit score for when I send him/her out in the real world.

 

[Captain Morgan]

I got my first credit card at 19. It was an American Express card and I applied for it on my own. Nobody had really taught me anything about credit, but I picked it up somehow. I knew that I needed to establish credit and I chose the AmEx card because (back then) you were required to pay the balance every month. Yes, there was an annual fee, which is why I eventually dumped the card a couple years later, but I wanted to make sure I wouldn't leave a balance on the card and felt pressure (sortof) to pay every month.

I have learned several lessons along the way, such as try to keep one (or two) cards for a long time because then you have more credit history. Another lesson was to keep track of spending and to ONLY spend what you can afford to pay each month.

I had gotten myself into credit card debt after dumping the AmEx, which was my fault. I didn't have much of a job and was spending too much on gas and food, then being left with no choice but to run a balance. I finally got out of debt, but stupidly did the same thing a few years later when switching jobs and living above my new means.

I have now been debt free for about 3 years and I pay my balance every month. I use the GM card to earn points toward a new vehicle, and I use the Discover card to get some cash back, which are the only two reasons I spend anything on the cards. No annual fee, and no interest payments.

 

[R1up0n1]

I screwed up about my 2nd year in college by putting gas and food on the credit card. I got myself into about a grand worth of debt in which I couldn't pay. My dad bailed me out of all the credit card debt, but he was smart in the way he did it...all to teach me a lesson in being responsible.

I wanted to get a new car in which I didn't have enough established credit to get a low interest rate so he co-signed for me although he paid the credit card bill for me, he had my loan officer issue him a check out of my loan for the new car which replaced the money he paid on my card. Yeah I know that gave me some negative equity in my new vehicle at the time, but he said I need to learn how to pay for things on my own and learn money responsibility.

Now about six years later I have had several new cars and negative equity is always there on a new car so it just doesn't matter. My parents still continue to help me out a lot not by paying my bills, but they will pay for my gas for the whole trip when I go visit them every few months or so.

Now my little brother..I don't know how he does it but he puts EVERYTHING on his credit card, but somehow he pays EVERYTHING off when that bill comes in every month. He always has the money in his bank account, but he says hey it's building up my credit and I don't get any interest charges as long as I pay it every month. I gotta say for him doing this for 3 years straight and him only being 21 he's really good at money management.

 

[2002R1]

i have a friend who is a credit counselor he tells people that they should put thier kids on their credit cards when they are like 10 but dont give them a card or access to it. he says that way they have a good credit history aslong as the parents dont mess it up. my mom put me on her credit card when i was 15 and now 10 years later i dont have a problem getting anything that i want. my credit score is almost maxed out its in the 800s highest it can get is 850. when me and my wife got together her score was like a 610 and now its in the high 760s.

 

[GixxerNHemi]

Im trying to clean up my act now...

Im going to be 22 in a few months and already Ive had 7 car (5 of them brand spankin new) 3 of those brand new cars i owned outright with parents help but the last 2 I got greedy and now have car loans.

I spent ALOT of money on cars and modding them over the past 6 years...esp the past 3. In my 04 WRX i dumped about 6k worth of mods into it....sold it after 1 year and got an 04 Cobra and dumped 5k worth of mods into it...now my 05 Ram laramie which cost me 37k I dumped over 5k into again...

Ive FINALLY learned my lesson......after losing about 25k!!!!! lol

Now im focusing on finishing college this semester and getting a new job in the next few weeks hopefully the one i interviewed for last week.

I want my father to take my truck off my hands so I can buy a new civic or something and lower my monthly payment and of course GAS!!!!! I spend about 80-90 bucks a week on gas right now (10-11mpg)


now that i bought the bike....I dont need a fast car anymore so I will get something very practical!!!! I still have an 02 M3 vert that is pretty much mine too.

...o yea...and I owe about 2k on credit cards....I paid off 4k over last summer!!!!

 

[Trip]

I want my father to take my truck off my hands so I can buy a new civic

I sold my big truck and got a 2 year old 2000 civic at the time that I completely paid off at purchase. That was the best move I ever made. Fixing the car is cheap and doesn't have any problems like my truck did anyway. Parts are very abundant if you ever need them. Possible to rice it up for speed if you want, but I am not like that. Gas is excellent. I keep my speed down and don't get tickets anymore because I don't have that big V8. It's a great car for my morning commute and don't have to worry about it depreciating quickly like my truck. The only reason I miss my truck is because I used the bed a ton.

 

[GixxerNHemi]

I sold my big truck and got a 2 year old 2000 civic at the time that I completely paid off at purchase. That was the best move I ever made. Fixing the car is cheap and doesn't have any problems like my truck did anyway. Parts are very abundant if you ever need them. Possible to rice it up for speed if you want, but I am not like that. Gas is excellent. I keep my speed down and don't get tickets anymore because I don't have that big V8. It's a great car for my morning commute and don't have to worry about it depreciating quickly like my truck. The only reason I miss my truck is because I used the bed a ton.

well....im looking at the new civic for a cheaper monthly payment and I est. a $150 a month gas savings. Im not looking to make it faster...LOL...Im used to a 500rwhp cobra...a 300whp WRX...and currently have an 02 M3 at my disposal....so im not going to put a fart can exhaust on a civic...

I actualy need a "normal" vehicle I wont get into trouble with. My past three vehicles including my current truck have personal plates and go very very fast and make lots of noise...and i dont exactly obey traffic laws very well...lol

so i want something "normal" and practical for once.

BTW...I will still have my truck avail. because my father is going to buy it out from me in which case I will still be able to use it if I need to. It will most likely hang out at the upstate house and come back down during the winter months.

 

[drewpy]

NEVER!!!!!!!!! as a college student, i am glad i never got one

 

[DLIT]

I only have one real credit card. It can only be used on base and it's 9% I think. I got a bunch of others just to make purchases w/ no interest for like 3-4 years. So I don't have to worry about interest. Now i gotta focus on paying them off. I'll put it this way. If I didn't have these cards i proly could just barely afford payments on an R1 LE. Well proly not.

 

[bumblebee]

Credit cards are tools, used properly, they can help you build your life, misuse one, and it can hurt you.

 

[DLIT]

:iagree: Very true. it takes way longer to build your credit up than ruin it.

 

[Gas Man]

Credit cards are tools, used properly, they can help you build your life, misuse one, and it can hurt you.

:iagree: I'm pleased to announce that I have charged up some good credit bills but right now I owe nothing on credit cards...

 

[thebiscuit]

i don't use crdeit cards, but i do use a debit card which just takes directly from my account... i still have the same problem as some people do with credit cards (not paying attention to how much is spent)... it's just so easy to swipe that card and not think about it...

 

[Rae]

I used to be in banking, you would be amazed at some of the things parents will do for their children. Personally I think that 16 would be a good age, IF they have a job, with a limit of $200-$250, with complete parental supervision!!:tt: I am pretty responsible with money but when I got my first card at 18 I knew nothing about what to do except spend and spend :2cents: , its a neverending vicious cycle...then I got married and we lived off my credit, ruined it, and its taken me a few years to fix it. You never realize it is happening till after the fact, nowadays people get into trouble with debit and credit cards b/c it almost feels like free money...till it gets turned off! :scratch: and you cant pay the bills!

 

[Gas Man]

Rae... I can go with that... you got to teach these kids responsibility at some age.