Should Your Teen Have a Credit Card?

Jim Liebelt | Senior Writer, Editor and Researcher for the HomeWord Center for Youth and Family at Azusa Pacific University | Monday, July 27, 2009

Should Your Teen Have a Credit Card?

A federal law taking effect next year will tighten rules about issuing credit cards to people under the age of 21. This will surely reduce the number of credit cards being issued to teens. But, is this a good idea? There are solid arguments on both sides of the issue. In the following article excerpt from the Wall Street Journal, the author, Sue Shellenbarger, makes a case against the conventional wisdom of limiting teen access to credit cards, noting that the key to responsible teen credit use appears to be good communication with parents about money, credit and responsibility.

Blaming credit cards for young adults’ money woes is popular these days; high-school and college students are putting way too many college expenses and other charges on their cards, the thinking goes.

But as credit-card issuers and Congress race to crack down on over-borrowing, do we risk barring the door so tightly that teens miss out on opportunities to learn financial responsibility?

In a recent article that bucks the popular wisdom about teen credit-card use, my colleague Karen Blumenthal cites a study that suggesting credit cards may be merely a scapegoat for a lack of family communication about money. Kids with credit cards aren’t the reckless spendthrifts they’ve been portrayed to be, the study shows. College freshmen with credit cards carry only a $169 balance, on average, says this 2,000-student study at the University of Arizona. And more than 60% of the credit-card holders demonstrated exemplary credit management skills, paying the bill in full every month.

To be sure, 70% of all the students surveyed (which included both teens with and without cards) showed bad financial judgment at times, failing to pay bills on time, maxing out credit cards or taking payday loans. But the credit-card holders were no more or less likely to commit these errors than students who lacked plastic. Instead, the significant factor was whether students had good communication about money with their parents; those who did, also had more control over their finances.

Source Wall Street Journal

For more information about teens and credit, see Jim Burns' article "Teens and Credit: Handle with Care" on

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