The problem with teaching the teens in your household to manage their finances responsibly is that you may not precisely be the best person to do so. Many adults were never taught themselves how to budget, save, and spend wisely. And this is especially true when it comes to using credit cards. But when the young adults in your home are ready to learn these important life lessons before they head out into the world on their own, it’s probably high time you learned a few yourself. And here are some basics concerning credit card spending that anyone, young or old, can benefit from, and that you should definitely pass along to your teenagers.
First and foremost, it’s important to get a credit card with the lowest possible interest rate, and this may require a little legwork. Teens generally have no credit to speak of, which leaves you in the unenviable position of co-opening an account with them so that they can build credit. But there is another way. If your teens have bank accounts, they can use their money as collateral to open secured credit cards through their banking institution. They simply provide a check for the amount of credit offered (generally a limit of about $500), which the bank will hold for a year in the event that charges are made but not paid. If your teens spend wisely and pay off their secured cards every month, they’ll get their collateral back at the end of the year (with interest) and end up with more credit card offers than they know what to do with, many with excellent interest rates.
