Steve L. Hatch
Most credit cards designed for students were created for college students – but can a high school student get a credit card? The short answer is: YES. The long answer would involve a lot of discussion!
As teenagers, many go out and get their first jobs, or are otherwise alert income from allowances or babysitting. It's the perfect time for parents to help them learn the basics of money management; which is something many families skip over; leaving graduating high schoolers to move on to college or the "real world" with very little real world knowledge of finances.
Just a few short years ago, it was not only next to impossible to give a teenager a credit card, but you would have considered a little on the crazy side to do such a thing! Times have changed though, and there are various credit cards on the market for teenagers that parents can use to help them learn the basics of financial responsibility.
Credit cards for teens include features like parental control and digital 'allowances'. It may be sweat-inducing to give your teenager a credit card, but it makes a good educational financial experience for your child- before it's too late for you to help them become financially responsible individuals:
Teach Them About Good Credit. With so many adults currently struggling to re-establish their credit or increase their income so it's easier to keep up with their monthly payments, it's never too early to teach teens how to manage money. Teaching them at a younger age can prevent them from over spending once they're on their own. Nellie Mae claims that the average freshmen college student has over $ 1,500 in credit card debt; and once a student realizes how easy it is to "get what they want, now", it becomes habit to use them to buy the things they want while in college. If the teenager enters the adult world with solid money management skills, they're less likely to get in over their heads in debt.
Your Options. If you're not concerned about your teenager establishing a credit history at this time, and simply want a way to teach the basics of money management, you can look for a prepaid debit card with a Visa or MasterCard logo. Some of these cards may have annual fees or transaction fees- which just gives you another opportunity to show how using a credit card is not the same as buying with cash. You could also sign your teen up for a checking account with debit card; or put them as an authorized user of an account you already have- or open a new credit card account with a low limit and put your teen on as a cardholder.
Gives Teen Access to Emergency Money. When your children become teenagers, chances are they are starting to spend more time away from you and on their own or with their friends. Sometimes they may have a need for cash- if a car breaks down and they need to be towed off the highway, or for long distance phone calls for example. Having a credit card in their pocket will make it possible for them to handle an emergency that requires access to money and can give you a little more peace of mind.
If you decide you are ready to teach your teenager the basics of money management and credit, make sure you spend some time researching the various options available to you before choosing an option. Regardless of which option you choose, you'll want to be sure to spend adequate time with your teenager and not expect them to know what to do with it on their own! Try using a service like Citibank's Credit-Ed program: http://www.citi.com/us/cards/cm/student/index.htm