Teen Credit Cards free essay sample

Don’t you think life would’ve been easier if you had a credit card when you were younger? Most people wouldn’t think, but you more than likely would have had a better future. Given a credit card and proper instruction, college bound teens would more than likely know how to better prepare for debt. It’s likely that learning about credit cards at an earlier age, maybe 14 or 15, would help in the long run. You don’t even really need to have one, just learn about the risks and benefits. Maybe you’re down in your luck, stuck on the endless rollercoaster of credit card debt. But maybe this wasn’t always inevitable. It’s likely that if your parents allowed you and taught you how to own a credit card when you were younger, you would know how to act in a debt situation. Many parents should, â€Å"Consider starting your teen off with a credit card tied to your account. Not only will your teen inherit your good credit rating, but it will also allow you to see how much they are spending. Consider having your teen only use the credit card for emergencies to start with, and then encourage only charging what can be paid off in-full when the bill arrives. This hopefully will curb your teen from taking advantage of the credit card, as it is very easy to let charging get out of control†(Tips for your). But you probably won’t actually have to own a credit card if you don’t believe you’re ready. Maybe all you need is an understanding. † What’s funny is that it would be great if, by the time you get to college, you actually already had a background in what credit cards are, how they really work, what they want you to do, what they don’t want you to do, and the truthful role that they play in your future finances. It’s one thing to establish a FICO Score, which everybody needs. It’s another thing, however, to emerge from college with a bad FICO Score, which most students do today. Because students don’t nderstand that when they get one of these credit cards, if they go over their credit limit, if they are not on-time in paying their credit card bills, that in fact that’s reported to the credit bureau†¦One of the easiest ways to establish credit, believe it or not, is when you are younger, when you are 12, 13, 14, if your parents have good FICO scores, if your parents are responsible, if your parents simply added you on †“ at that time – to all of their cards as an authorized user, they don’t have to give you a card, they don’t have to let you know that they did that, then their FICO scores would become your FICO scores. You would establish credit based on their history† (Orman). So parents, that means at early ages, a teens credit card is partly your responsibility, and the teen has to learn everything from you. Having a credit card isn’t just about money and learning money management, even though that’s what it seems like. It’s also about teaching life lessons like responsibility. â€Å"Many parents choose to give their teenager a credit card because it increases their sense of responsibility and because it helps to educate them about handling money. Issuing credit cards for teens is a safe and convenient way for kids to learn about credit cards, budgeting, and general finances. Learning proper money management is a big advantage for a teenager and will be useful in the future† (Garrett). Not only does having a credit card give a sense of responsibility, but also a small amount of debt can have positive influences in a teen’s self-esteem and self-view. Researchers have had two competing views of how debt might affect people’s self-concept, Dwyer said. Some have said debt should have positive effects because it helps people invest in their future† (Grabmeier). So even with debt, owning a credit card is a rewarding experience. Even though giving younger teens a credit card to help them would be a great idea on paper, sometimes it can be risky because teens probably won’t know everything, and might end up in a tight spot. Say, for instance, there is a teen that believes they should get whatever they want, no matter what it costs, like a $300 t-shirt, â€Å"That type of behavior goes into college, where she’s now given a credit card, and she now starts to rebel and she buys everything and anything she wants on that credit card because she wants to look like the other kids, she wants to feel like the other kids. The truth of the matter is you have to think beyond that†¦ think beyond this one sweater or this one, cool deal on eBay, or on Amazon, and that you’re saving money. It’s not. Are you saving money? † It’s, â€Å"Is this a need? Or is this a want? † Because when you graduate college, when you are on your own, as life goes further on, you may be the one responsible for the student loan debt that you’ve created (Orman). Not only is irresponsibility sometimes a big issue with credit, but there are also many other dangers, such as identity theft. à ¢â‚¬Å"Young people, 18-29 years of age, are the number one target for identity thieves, according to Quest, a communications company that is working to raise awareness of the issue (Schonberger). Identity theft can happen at any time, and any place, and some teens might not know how to handle it if it ever happens. However, if a teen is taught early by their parents that everything that they do will have an impact on their future, and that the credit card isn’t just a piece of plastic that hands out free money with no strings attached, then teens would have a much smaller chance of forcing themselves into debt and may be more cautious with their credit card safety. The key†¦ is the involvement of parents in teaching children how to use both credit and debit cards—and in monitoring their childrens use of plastic. You dont give a child a musical instrument and say, ‘Plunk around on this for a while a see if you can learn to play,’ she said. ‘The act of giving kids a credit card or a debit card isnt going to give them good money-management habits. There has to be teaching and practicing’† (Levine). Parents always play an importa nt role in their teen’s education; why stop with school, when you can teach something useful. Younger people should get credit cards or at least an education in them, because it would apply necessary life lessons and prepare them for their future. Sending a teen headfirst into life without help or guidance probably isn’t the best idea. If you don’t think your teen is ready for a credit card, play it safe and set them up with a secured credit card. Secured credit cards, where you or your children (or both) deposit a certain amount into an account, and your children can learn how to manage money the way most adults do.