My Teenager Wants a Credit Card and I’m Frightened

Encouraging my 18 year old to apply for a credit card seemed akin to encouraging him to run with the bulls in Pamplona. It’s dangerous for teenagers to have credit cards, right? They can go out and put anything on the credit card without any concept that they actually have to pay for the item when the bill comes.

Yes, this is a frightening thing for most parents but an even more frightening scenario is your teenager stuck late night at college with a flat tire (coming back from the library, of course) and no way to pay for it because he doesn’t have enough in his checking account to cover it. I guess you could just give him your credit card but honestly, that’s beyond frightening because your credit limit is most likely way higher which can really inflict some serious damage. Plus, it’s time that he starts to establish credit so when he graduates, moves out (yea!) and needs a car, he can apply for it on his own.

My daughter has gone away to school with a credit card and I’ve had no fear or anxiety because she is extremely conservative and responsible. She orders her books online because it’s cheaper (relatively speaking because all college books seem over-priced) and I never wanted her to use her debit card for online purchases. She’s been great with it and has really established herself as a financially-responsible adult.

Then there’s my son…he’s what you’d call a “spender”. His day isn’t complete unless he’s bought something, even a pack of gum. He’s extremely generous and will be the guy at the bar who buys drinks for everyone but this type of person can be deadly with a credit card. But that doesn’t mean he shouldn’t also be taught at an early age how to manage a credit card and to establish credit in his name. That’s why it’s important to look for a credit card that will give your “spender” a low credit limit until they get used to the credit concept and prove they can handle it.

Abri Credit Union offers a card for young people with a $250 credit limit. This is a perfect training-wheel credit card. It’s important too to remind your child to pay at least the minimum balance on-time, every month.  By showing they are responsible and building a great credit history, they can request a higher credit limit because $250 doesn’t get them too far in college. Because of regulations and such, many institutions don’t automatically increase credit limits so you have to request it. Increasing your credit limit on an existing card is also much better for your credit rating than opening up additional cards or continually charging up to your limit.

Whether you have a saver or a spender, loosening the reins and letting your child get their first credit card is scary but if it’s done correctly, it will make them awesome adults and keep them from living in your basement forever.

For additional information about Abri’s low limit cards for young adults, visit our website.