Credit Card Deals for Teenagers - Basic Training in Money Management

November 30, 2007

Credit card companies extend their sphere of influence onto new market segments. In the attempts to attract more new clients, banks got on to teenagers. Card issuers have designed special credit card programs for adolescent kids. Though credit cards for teens cause contradictory attitudes, such a precedent do exists. And now it is your, parents', headache to move heaven and earth in order to protect your children from starting their independent financial life up to their neck in debt.

The recent banking institutions' buzz around teens was provoked by the last baby boom happened in the nineties. Kids born back then have grown up and now that they are in their teens, card issuers just cannot miss such a rich haul of potential credit consumers. Besides, a survey conducted by a Harris Group showed that adolescents have spent about $ 195 billion of their own "pocket" money in 2006.

Though it is not an easy task to talk sense into a rebellious head, remember that your kid's financial future is in your hands. You have to inform your children about the responsibilities and dangers your child face becoming a credit card owner. While you are well aware of the fact that thousands of young people end up in bad debts every year, a 13-14-year-old kid is not likely to take credit card use seriously. A teenager treats it like a game that might turn out to be a wicked one for him or her.

So, how can you prevent your child from unreasonable plastic use? The best way to do it is to educate your kids in a financial field. Besides, according to the results of the survey conducted in 2007 by Capital One, over half of interrogated teens are willing to learn how to manage finances. About 75% of the youngsters have displayed an interest in getting to know everything about the way such large assets as houses and cars are financed. And more than a half of the questioned have expressed a desire to find out information about banking system and credit cards.

And, luckily, it is not a problem these days to get the necessary information. Do not think that credit card issuers are always after your money and that their mission is to make maximum profit of your credit card deal. Some financial institutions stimulate young people's striving to become well-grounded in the questions of credit card use. Capital One, for instance, together with monthly statements sends you an educational booklet with basic credit terms' definitions and helpful tips on managing your credit card.

Visa offers credit cards for teens, but such plastics can be processed only on fulfilling 2 basic conditions - the applicant should be a minor and provide the card issuer with a no credit history check. Giving out this card to your kid you may be easy on that score, as you have a total control over the credit card limit. Such credit cards are similar to secured credit card with some extra options. The card's credit line is equal to the amount of a deposit you have made.

Of course giving a credit card to a kid's at their disposal is risky. It is like playing with fire. You might get burnt or might learn to strike a match. Distancing teens from credit cards is not a way out. But teaching your kid the basics of money management and peculiarities of credit card use sticking to an in-depth educational plan will give you guarantees and a peace of mind about your child's successful financial future.