Opinions differ regarding whether it's smart to give high school students a credit card. Credit cards are useful tools and provide emergency cash, but they're also dangerous if not used responsibly. Since many young adults make financial mistakes, some people feel high school students are too young to manage credit. But although credit at a young age poses some danger, there are reasons to get a credit card in high school
It takes years to build a strong credit history. If you get a credit card in high school, you can build credit at an early age. After graduating college, it might be easier to buy a house or finance a car once you find employment.
Many young adults make credit mistakes because they're never taught how to manage credit. But if young adults get a credit card in high school, they can learn credit management under their parents' guidance. Their parents can discuss the importance of credit and the danger of debt. For this to work, parents must know how to manage credit themselves.
Even as teenagers, some kids don't understand the concept of money. As parents teach their children how to save, budget and balance a checking account, they can also teach credit lessons. A credit card gives kids hands on experience. They can make decisions regarding whether to purchase something, and they can be responsible for paying off any charges they incur.
Teens under 18 cannot get a credit card without a cosigner. Getting a credit card at an early age allows parents to keep tabs on their children's spending. As a result, parents can identify poor spending habits while the children are teens, and help erase these habits before their children become adults.
The same way some teens have a cell phone for emergencies, giving a high school student a credit card also provides emergency cash in case they run into a situation. It's important for parents to explain that credit cards are not an extension of their income. If teens understand this concept, they're less likely to spend impulsively or buy things they can't afford.
It takes self-control to manage a credit card wisely. With plastic in your wallet, you have the power to buy anything you want as long as it doesn't exceed your credit limit. Since parents have to monitor their children's credit card use, giving high schoolers a credit card teaches self-control at a young age. They learn early on that a credit card isn't a magic card. And if the child doesn't have self-control, parents can take away the credit card.
Ideally, high schoolers should be responsible for all charges they put on a credit card. This teaches responsibility, plus they learn how to manage their money and pay bills at a young age. It's a good idea for parents to give their children a monthly spending limit, maybe up to $50. Also, high schoolers should only have a credit card if they have a part-time job, so they can be responsible for their own charges.
Putting a credit card in a high schooler's hand can be risky, but giving them access to credit at a young age also teaches valuable financial lessons.
Why do you think it's a good idea for high schooler's to have a credit card?