It's never too early to start teaching the basics of credit and personal finance, so if you can start by the time your child turns 12, great. If you're confident your high school freshman or college student can handle the responsibility, a credit card can be a good tool for learning the ropes, especially if you know and trust the credit card issuer.
Why Get a Teen a Credit Card?
In a recent study by marketing giant Experian, 21 percent of consumers ages 18 to 29 with credit cards in their own names had credit scores above 750, compared to just 3 percent of those who didn't use credit cards. This means that getting your teen a credit card will likely be a good time to teach them responsibility.
If you truly want your teen to have a healthy financial future, a credit card is a good first step. When you have a chance to have the credit card conversation, you can talk about budgeting, and you can even see what types of purchases your child prefers to make.
So, Is There a Proper Age to Get One?
Experts say it's never too late to ask your teenager to consider getting a credit card earlier rather than later. This is a great way for your son or daughter to start building a credit history, and to learn to use credit responsibly at an age when they are more likely to do so.
You won't have to worry about things going crazy. Parental controls are not required by Federal law, but you can set some basic controls to make sure your child is only making credit card purchases you approve of. You can also set your credit card account to either a "junior" or "senior" card (depending on your state's legal age for high-risk credit transactions) or to "no" credit transactions.
Is It Easy to Get Your Teen a Credit Card?
The Credit Card Accountability Responsibility and Disclosure Act of 2009 has established certain rules before credit can be extended to people below the age of 21. This includes, but is not limited to:
- Limiting the possibility of credit card companies to market products to students on or near campuses and at school-sponsored events through banning a gift offering in order for students to be enticed to apply.
- Preventing issuance of credit cards to anyone younger than 21 without a written application that shows that the applicant can make the payments or can get help from a co-signer 21 or older.
- Prohibiting the marketing of preapproved offers to those younger than 21 without consent.
However, while it's not easy, it's certainly possible.
Understandably, some people tend to hesitate when the conversation of giving teens a credit card comes up. It's actually a good way to start teaching them about finances and responsibility. There is no exact, proper age to do it, but around high school or early college may be the best option.
Trying to find helpful money apps for kids? Download Kiddie Kredit, the mobile app designed to educate children on the credit system by completing chores!