Some pros of teens under 18 getting a credit card include being able to learn about budgeting and money management, as well as building up their credit scores, notes U.S. News & World Report. A drawback is that teens might not spend money wisely and don���t understand the ramifications of abusing a credit card.Continue Reading
While overspending and being irresponsible with credit cards is a con for teens, the parent can co-sign for the card and set spending limits, according to TheMint. The recommendation is to give the teen a low-limit credit card and require the teen to pay the bill each month. Parents should not help their child or bail them out if they can���t pay the bill. Make sure the teen knows how important it is to pay the bill on time each month and that it is their sole responsibility. Choose a limit based on what they can reasonably afford with their part-time jobs or even their allowance, if they still get one.
Another disadvantage for credit cards for teens is that a parent needs to co-sign for the card, says U.S. News & World Report. While this can be a good thing, as the parent has some control over the spending limits, it doesn���t guarantee the teen is going to pay the bill on time. The parent might eventually have to take over payments if the teen refuses. If the teen doesn���t make payments on time, the parent���s credit takes a hit.
A good benefit to a teen having a credit card is that they have some financial protection in case of an emergency, notes U.S. News & World Report. If the teen is driving when his car breaks down, he has a credit card to pay for towing the vehicle or getting roadside assistance.Learn more about Credit & Lending