How Should Parents Teach Teens About Credit Cards? by Nancy Trejos
a 2007 Charles Schwab survey that showed that only 45 percent of teens know how to use a credit card. Even worse, just 26 percent of teens understood credit card interest and fees
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there are prepaid cards targeted specifically at teens, such as the Visa Buxx card. With such a card, Bellamkonda would be able to log in and monitor his daughter’s spending online
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Bill Hardekopf, chief executive of LowCards.com, said parents should pull out their own credit card bills and talk their children through them. Explain the interest rate, minimum payments, grace period and finance charges. If they’ve had late fees or payment problems, they shouldn’t hide them. “Use these as teaching examples,” he said. “Getting a teenager a credit card while she lives in your home is a great teaching opportunity on finances.”
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there are prepaid cards targeted specifically at teens, such as the Visa Buxx card. With such a card, Bellamkonda would be able to log in and monitor his daughter’s spending online
…
Bill Hardekopf, chief executive of LowCards.com, said parents should pull out their own credit card bills and talk their children through them. Explain the interest rate, minimum payments, grace period and finance charges. If they’ve had late fees or payment problems, they shouldn’t hide them. “Use these as teaching examples,” he said. “Getting a teenager a credit card while she lives in your home is a great teaching opportunity on finances.”
I agree it is wise to explain the use of credit cards to teenagers. I also agree it is wise to have them actually use their own card, assuming they aren’t unreasonably immature and have shown an understanding of personal finance.
Books: Money Sense for Kids – Growing Money: A Complete Investing Guide for Kids – The Motley Fool Investment Guide for Teens – Raising Financially Fit Kids – A Smart Girl’s Guide to Money: How to Make It, Save It, And Spend It
Related: Teaching Children About Money Matters – Student Credit Cards – Majoring in Credit Card Debt
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