Deciding when teen should get a credit card

Dear Parent,

It has come to my attention that you are considering whether or not to allow your teenager to have a credit card. I hope you don't mind me giving you my opinion on the matter.

Why does your teen need a credit card? I realise that teens have more to spend their money on now than maybe we did when we were their age; but most of the things, especially if they are still living under the parental roof, are non-essentials.

Maybe, you or your teen received a mailing from your credit card company offering a special introductory rate for taking one of the many cards now being targeted at teenagers. The credit card industry has now saturated the market with regard to adult consumers, and it needs fresh blood.

As you are aware, credit cards used sensibly can be invaluable to financial planning. The problem is that very few teenagers understand how they work. Give a teen a card with a £1000 limit and the chances are that they will spend up to that limit. They are not going to think about the interest that will be charged or how they are going to repay it. To them, it is little more than play money.

Increasing numbers of young people are finding themselves saddled with massive debts even before they have started work, and credit cards are one of the main culprits.

Maybe you have decided that you will give your teen a credit card that is paid by you. This may remove the danger of them getting into debt but it is hardly the best way to teach them financial responsibility.

Rather than giving your teen a credit card, why not let them have a debit card or possibly a pre-paid credit card. Either type would mean that your teen wouldn't have to carry large amounts of cash while ensuring that they could not spend money they don't have.

I hope this has been helpful to you. Personally, I don't think any teen should be given a credit card but it is up to you to decide.