“Over my dead body” are the words that come to some parents’ minds when their teenager asks for a credit card. I do not have any children yet, but aren’t credit cards for adults? Next thing you know, a 7-year-old will be allowed to drive a car.
Justin Bieber has a credit card but the popular teenage singer has about $100 million to his name, right now. His mother is strict about what he is allowed to spend from month to month. Perhaps some parents question her sanity in giving the nearly 17-year-old a credit card. Why not do it the old-fashioned way and give him cash?
The words “interest rates” mean very little to teens. After understanding interest rates on my college loans in my early twenties, I wondered why there was not a finance class in high school. A survey in the mid-2000s found that almost half of teens knew how to use a credit card. However, only about a quarter of teens grasp the concept of interest rates.
Many people have heard about the irresponsible college student who was not ready to tote a credit card. Parents are beginning to wonder what the best approach is to teaching their children about responsible credit card use. Maybe giving them a credit card now while the parents can regulate it is the best answer. Giving a teenager limits and clear guidelines are essential to making the idea work. They may have to find a job. They may also lose the card, if they spend more than allowed. If the parents are good role models of this, the teenagers will be gaining valuable life skills while they imitate the famous Justin Bieber.
Doing it the old-fashioned way also does not help the teen to start building a credit history. In college, I know I could have used that boost to get started as a new adult in the world. Having insufficient credit history can be the same as have a bad credit history. For those who do not know the pain of this, I can tell you that a report revealing insufficient credit history is a rude awakening. Personally, when I was 19 or 20, I thought paying everything on time was all I needed to receive good points.
It sounds like Momma Bieber might be ahead of the game on this one. She’s not insane; she wants to teach her son responsibility. Bieber even told an interviewer that once he has spent his allowance, he has to wait for the next one to spend more money. His mother wants what is best for her son just like every other mother.