Teaching Teens about Credit Cards

First off, I must state profoundly that I support education on any subject including credit cards, but deep down in my heart something is just not quite right. I have several challenges to teaching credit card financing and giving credit cards to teens. And first I make this comparison. Teaching your teen about credit cards and giving them a credit card to me is like teaching your teen about sex and then handing them a condom. “Go ahead Timmy you’re going to need to practice to be good at it. You need to build your score.”

You may say, “Well, sex is completely different.” Is it? Is it really? Like credit card spending, it is something we all do, some become obsessed and overindulge, and if not careful you can find yourself in a very awkward situation. Credit card spending is very much like sex, and that euphoric and sometimes ill feeling we all have afterward.

An argument for teaching teens how to use credit cards is so they understand the rules and can begin to establish a credit score. Personally, I feel offering credit cards to teens is big business lowering the spending demographic to make more profit for themselves, but I digress. In regards the theories of teaching teens credit, I will tackle these ideologies separately. First, I agree WE all need to learn the rules and read the fine print, but perhaps it is best we teach teens the fundamentals of earning and spending. Have your teen get a part time job, earn money and learn to spend what they earn instead of developing bad habits of paying out of convenience. It is convenience spending that gets all of us in trouble. Start with the basics, and if your teen shows responsibility with their money then start them on a credit card with a very minimum limit. If you see your teen not being responsible with their cash, then they’re not ready to graduate to a credit card.

FICO and Credit scores are an insidious ideology that absolutely with no doubt needs reformation. It is a trap by big businesses to keep tabs on our financial habits, provokes exploits of rising and lowering of credit limits and interest rates. I probably could not have said this a year ago, but now many people with good scores find their credit scores drop at the whims of creditors in this banking crisis. Why would anyone want to be a prisoner in this system? It is bad and in most cases consumers have very little rights. Why would you teach your teen to be part of a system that is geared to exploit?

And lastly, teaching fiscal responsibility is a good thing, but what about teaching them reality of an adult life; home improvements, car repairs, children, job loss, sickness or injury. All these things cost money and could put a good consumer in deep debt and lower their credit score. You see, the challenge is we have no choices other than credit cards to pay for emergencies. Bank loans have gone out the window. Payment options are going out of style. So one $2,000.00 repair bill will start the debt and most likely you can’t pay that off in one month, so interest is tacked onto it, and then next month something else happens that requires a credit card purchase. You see the downward spiral. For some who make a good salary may not have issue with this, but if your salary barely covers your bills-you’re screwed. And kids out of college do not make that much money to start! Teach your kids that.

The reality is, in regards to credit cards- the cards are stacked against consumers. I see two choices for parents, teach your child fiscal responsible, give them a credit card and wish them luck, or become an advocate for creditor regulation and fiscal change in this country. And how can you teach your child fiscal responsibility when big business is not fiscally responsible? Why have your children carry the burden when there is little legislation to keep big business from exploiting the consumer? I say fight for your children’s financial freedom and future and give them new legislation so the laws on their side, not big business.

Again, I stress, teaching teens about their finances is a good thing, but let’s not put the burden on them, the burden lies on us to overcome the financial traps and pitfalls of big business and give our youth a strong economy and fiscal freedom in the future.