Should Teens Have Credit Cards?
There are three good reasons for giving your adolescent son or daughter a credit card. First, it comes in handy in an emergency. Second, using a credit card provides experience in using and managing credit. Third, using a card enables an adolescent to establish a credit history.
Of course, there is a powerful argument against giving your child a credit card: Nothing says SPEND like easy access to credit. ADD compounds the potential for overspending. ADDers tend to spend on impulse and to be bad at monitoring their credit card balances. What's more, they may have trouble paying bills on time.
Given the pros and cons, what's to be done? I urge parents to view credit cards, debit cards, and other forms of "plastic money" the way good doctors consider X rays: avoid them if possible, but if absolutely necessary, use as few as you can to get the job done.
When to Consider a Credit Card
A prepaid credit card makes sense if you want to give your child the use of a card but don't yet trust her to use it wisely. With a prepaid card, the spending limit is the amount that has already been deposited into the account - there's no risk of wild spending.