Choosing The Right Plastic For Your Teen

Your teen’s financial future starts with what you teach them within the walls of your home.  Although it’s tempting to simply pay for all your teen’s expenses and bail them out any time there is trouble, they will learn more from you setting rules and boundaries with them and creating a situation in which they can learn and grow.  Once your teen has access to money, it’s time to sit down and decide which type of credit card for teenagers is right for your particular situation.  If you have an open discussion between your teen and both parents about how to handle money and credit, they will learn much more than if they are simply handed a wad of cash each time they run out.


The Traditional Debit Card

When you offer your teen a traditional debit card, they are able to use money that is in a checking and savings account.  The money can be deposited by anyone who knows the account number and has access.  These accounts are easy to set up and use, but if your teen is not experienced in balancing a checkbook, it is also easy to rack up overdraft fees for any transaction that is done when the account balance is at zero.  Debit cards also do not help to build a history of credit for your teen.

Prepaid Card Or Stored Value Card

A prepaid debit card from is a much more viable option for a teenager who is new to the financial scene.  With a prepaid card, your teen’s spending limit is set to the amount that is loaded on the card.  You and your teen can keep track of any deposits and deductions online, making it fairly easy to keep track of where your teen is spending their money.  On some prepaid cards, the employer can load the money right onto the card.  These cards are also accepted throughout the world, and they are typically offered by the major credit card companies.  Although you may pay small fees for maintenance and activation, the amount will still be less than you would pay for overdraft fees on bad transactions.

A Joint Credit Card

If you really trust your teen, you can choose to use a joint credit card between him or her, and you and your spouse.  This allows your teen to have access to your accounts, and gives them the ability to charge items on your card.  These cards are great for emergencies when the teen needs cash, but you are also responsible for any debt your teen incurs when using your card.  If they go on an out of control spending spree, you are responsible for making sure the bill gets paid.

Assessing Your Situation

Finding the right card for your teen is a matter of assessing the responsibility level of your teen and your particular situation.  For parents who can’t afford to give money to their children and rely on them strictly to manage their own finances, teaching them to use a prepaid credit card may be the most beneficial.  You won’t find yourself holding a large bill for expenses your teen didn’t realize were building if you choose to use a prepaid card that has a set limit already.

About the author
Mrs. Hatland is a 30-something married, mom of 7 and the face behind the popular online publication, Motherhood Defined. Known as the Iowa Mom blogger by her local peers and “The Fairy Blogmother” worldwide. She has professional experience in working closely with clients on brand ambassadorships, client outreach services, content creation and creative social media advertising exposure.

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