How to help teens develop credit card history without... - Student Credit Cards Questions


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How to help teens develop credit card history without the risk of debt?

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Even though the credit card debt amounts maximum to the teens and college students, but remember, steering your teen away from these cards offers its implications too. Most of all, it means letting your child graduate from the college without any information about how to handle finance and how to make payment through the credit cards. Importantly, it also means depriving your child of the credit card history, which is extremely important for letting them realize that life is even expensive than what they think. Fortunately, there can always be certain methods that can help teens develop their credit card history sans the need of falling into the puddle of debt.

First of all, the good thing is that law prohibits people below 21 years of age to get credit cards. This means parents need to be relied upon and so, you can always give a glimpse of credit card to the teen through the debit card. If your child proves himself/herself as a responsible user of the debit card, he/she can be relied for the credit card as well. It’s like, letting them learn the use of card for transactions, but also putting into their head that money should be used, in maximum times, for the purchases.

If you want your child to develop a credit card history, a good way can be to make your child an authorized user of your credit cards. This surely means risking your expenses, if you are ready for the risk and wish to teach the child, you can let him/her co-sign the credit card with you. As long as you are keeping an eye on the child’s expenses, this is a very good way of letting him/her build his own credit card history.

Another good option, if you do not want to co-sign with the child and still want to develop his credit card history is to give him secured credit card. This card limits the user by asking him to make deposit with issuer. This amount will therefore represent the limit of credit card. Apart from this aspect, secured credit card is more or less like a usual credit card only. It is good options to allow a child develop his credit card history.

Finally, it is important to bust the myth that credit card history can build up if you regularly use it. Even if you are not using it for a month, it will still help you in building the history of the credit card!

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