Teen Credit Cards – Pros and Cons

If used properly a teen credit card is definitely an advantage for teens. But when entrusting teens with plastic money, parents have to be cautious. This article covers topics related to teen credit cards and includes the following

How is it possible for the teens to get credit cards?

What are the possible dangers of teen credit cards?

What are the advantages of using teen credit cards?

How can your child be made responsible for using credit cards?


Teen credit cards are becoming more popular each year. Today, many teens hold part-time jobs and juggle volunteer work, social lives, and extracurricular activities as well. For busy teenagers, credit cards are a convenience and a possible safety measure. However, many parents also worry if entrusting minors with credit cards is a wise decision. After all, credit cards have traditionally been the forte of those over 18 – those who have jobs and adult lives.

How Can Teens Get Credit?

Even though most credit card companies only issue credit cards to those who are eighteen years of age or older, there are many ways that teens can still make use of credit cards. There are special credit cards called prepaid or junior credit cards. With parental permission and money up front, any child can have such a card. It works just like any other prepaid card – money is added to the card account and the child can use the card just like a regular credit card to make online, over-the-phone and in-person transactions.

Also, many stores selling credit cards allow teenagers to sign up for credit with parental consent. Some card companies allow parents to sign up their children as authorized users on their own cards. Teens and children can then use their parents’ credit cards, although parents remain responsible for the debt.

Drawbacks Of Teen Credit Cards

Before parents agree to teen credit cards for their children, they should be aware that these cards can have a number of shortcomings:

  • Unrealistic spending attitudes
    Since paying with plastic is so simple, teens and younger children can develop unrealistic attitudes about money and spending, especially if they do not have to work for their money.
  • Overspending
    Many studies have confirmed that customers of all ages spend less when paying with cash. We are far more likely to spend more than we can afford when we spend with plastic.
  • Risk of identity theft
    Credit cards of any type contain private information and can be used by a criminal. If a teen card is stolen, transactions may be made by the thief on the card.
  • Riskier purchases
    Since credit cards allow for telephone and online purchases, teens who are less aware about fraud and scams may end up buying from disreputable companies – and may end up paying heavily for doing so.
  • Extra fees and expenses
    Not all teen credit cards are free to use. Some carry hefty annual fees, registration fees, and additional charges for each amount of money deposited. To encourage new customers, though, some card companies offer no-fee cards that cost less to use.

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