| In the United States, people under the age of 18 cannot | | | | later. It is up to you how the bank account itself is |
| legally enter into any contracts without a co-signer, but | | | | funded, but some parents have set up "direct deposits" |
| what about the increasing number of parents who are | | | | for their children's allowance- which the child accesses |
| getting credit cards in their children's names? Do | | | | using their debit card. |
| minors really need access to credit cards? | | | | A "Charge Card" is another good option for the |
| It's really a decision that is unique to each family. The | | | | younger crowd. While they can be used to charge |
| most common reasons parents may decide to get a | | | | purchases, you cannot carry a balance from month to |
| credit card in the name of their child include: | | | | month on the card and must make the payment in full |
| For emergencies | | | | each month. This will teach your child responsibility for |
| Letting the child (probably a teenager) do their own | | | | "charging"- provided you don't just pay it off each |
| school shopping | | | | month for them without some discussion or maybe |
| Purchasing lunch and other necessities while out with | | | | requiring the teenager to use their part time job or |
| friends | | | | babysitting money to make the payments. |
| For traveling (perhaps the child visits family members | | | | If you decide you want to get a credit card, charge |
| regularly) | | | | card, or debit card for your own child, be sure you look |
| When you are deciding whether or not to get your | | | | into the rules of such an account with the provider you |
| child a credit card, you'll want to think about their age | | | | want to go with. Some credit card companies restrict |
| and maturity level. An elementary school student has | | | | the "additional cards" to people of a minimum age; |
| very limited knowledge of what money is and how | | | | while others allow anyone of any age to be the |
| people get money. On the other hand, a teenager | | | | secondary card holder. Same goes for charge cards. |
| often has a better concept of how money is earned | | | | For debit card accounts, there are banks that offer |
| and what it's used for, and could be taught appropriate | | | | youth checking or savings accounts with debit cards |
| use of a credit card. | | | | that are specifically geared to the needs of teenagers. |
| Many parents like the idea of getting their teenager a | | | | That might be your best option for instilling financial |
| credit card in order to start teaching them about | | | | responsibility in your children. |
| financial responsibility. If this is your goal, then obviously | | | | How to Use Credit Cards, Charge Cards or Debit |
| you don't want to hand the credit card to your child | | | | Cards to Teach Financial Responsibility to Children |
| and let them have at it! You'll need to spend some | | | | When getting a card issued in your child's name, it's |
| time discussing the reasons for the child to have a | | | | important that you spend some time with the child |
| credit card, set limits, and discuss how payments will | | | | teaching them the basics. Don't take for granted that |
| be made with the card. Will your teenager be | | | | they will already have this knowledge. If the goal is to |
| responsible for paying back the charges made to the | | | | use the cards for teaching financial responsibility, here |
| card? If so, be sure you and your child discuss this as | | | | are some things to consider: |
| well. | | | | Teach your children not to lend their cards to friends |
| Alternatives to Credit Cards | | | | for any reason |
| What parents may want to consider instead of an | | | | Review bank statements together monthly and |
| actual interest-bearing credit card is a debit card. | | | | compare receipts with purchases made on the |
| Setting your teenager up with a bank account with a | | | | statement |
| debit card teaches them to spend money they actually | | | | Teach children to pay more than the minimum |
| have, rather than spending money and paying for it | | | | payment - and teach them why that's important! |