Should There Be An Age Limit On Giving A Credit Card?

5:59 PM, Oct 26, 2011   |    comments
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Undated -- Should pre-teens get credit cards? A blogger on Mint.com thinks credit cards are a good idea to teach middle school students financial literacy and good credit card use practices.

We spoke to Cyndy Hayworth from Junior Achievement. The organization teaches financial literacy to middle school students.

Hayworth says there are factors parents should consider before handing children a credit card. She says you should consider a child's maturity, their knowledge of how to use a credit card and make sure children understand the rules and repercussions placed on the card. 

Hayworth says some experts say children should get credit cards at age 18 and others say 16. "If you wait until age 18 and your child goes to college, the influence of the parents keeping tabs on spending habits is lost. But, if you give your child a credit card linked to your account with a preset limit, the parent stays in control and can use the card as a teaching tool. Most teenagers who have a credit card, also have a job and a checking account," Hayworth told us.

Hayworth said, "The advantage of your child having a preset credit card is that you have a tool to teach responsible spending habits. The negative associated with your child having a card is their lack of understanding how credit can influence their lives down the road."

So what are the top things parents should look at before giving their kids credit cards? Hayworth says, "First and foremost, parents should understand the use of credit cards themselves. If parents have a hard time reigning in their spending habits, then it will be hard for them to teach their child anything different. Most children learn their life skills, good and bad, from their parents. Therefore a parent needs to understand the use of credit before they can teach their child."

Hayworth recommends starting your children out with a low credit card limit, about $25-$50. Tie your child's credit card into your account. Hayworth said parents should have the account setup so that they are notified each time the child uses the card and what they're using it for.

Junior Achievement's middle school programs focus heavily on financial literacy. Parents are welcome to call the JA office at 299-4339 for information about kids and credit cards.

WFMY News 2

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