According to studies, about a third of all high school students actually carry a credit card that is co-signed by their parents. This really raises the question of whether kids in their teens are equipped to handle credit. Will having a credit card too early instill bad money habits?
I am having serious reservations about letting my kids have a credit card when they are in high school. I did not even have my own credit card when I was in college. My parents did give me a credit card when I took a little vacation when I was in college. I only got my own credit card when I started working. Here are my thoughts and reasons why a high school student should not have credit cards.
1. They are at an age where peer influence is great. What brand of shirts they wear, what cell phones do they have are terribly important things for high school kids. To a certain extent, any kid will be influenced by their peers in school. I fear that if a high school student sees their peers simply take out a card to stuff, they will think it is “normal”.
2. Young adults need to learn the concept of delayed gratification. With credit cards, it is so easy to fall into the trap of ing things before you have earned it. I’ve met many people who have always paid their bills (including credit card bills) in full every month. The one common thread among them is that their parents have brought them up with the concept of never getting into debt.
3. Kids need to learn that you have to earn something before you can something. That was what my parents have taught me. Before they bought a TV, they made sure they had enough to either write a check or pay cash. I do not want my kids to have more credit card debt in January after a Christmas binge when they are adults.
4. I feel that my kids need to be taught that the ability to have credit has to be earned. One of the reasons I never carried a balance was because I felt that I was so used to making sure I had cash before I spent on anything. I’m not too sure that I’ll have the same atitude if I was given a credit card early in my life.
How about Prepaid Credit Cards?
Some parents might argue that giving a high school student a prepaid credit card is a good way to start learning about money management and budgeting. Well, in my younger days, there was no such thing as a prepaid credit card. Perhaps a prepaid credit card is OK, but I’m not totally convinced.
If you have ever given your high school kid a credit card, I would like to hear your experience.