Parents Giving Kids Credit Cards May Be Helpful

Debt Collection Expert Discusses the Facts About Kids Using Credit Cards

Parents Giving Kids Credit Cards May Be HelpfulDebt collection expert John Monderine responds to the question of whether kids should have credit cards.An article from CNBC, “So Your Kid Wants a Credit Card. What Do You Do Now?” published yesterday discusses the question of whether it’s advisable for high school-aged children to be given credit cards by their parents. Author Herb Weisbaum says “[e]xperts say it all depends on the child and how he or she will use the card.”The key, says Weisbaum, is the teen’s attitude toward the question of credit. If they “look at the card as a ticket to more spending,” the situation warrants precaution.

On the other hand, he says, “even though [kids] don’t have a credit history yet, college-bound students may find offers that are comparable to what someone with excellent credit might get. The credit limit will be much lower, but the terms—including rewards—may be the same.”

John Monderine, CEO of the debt collection agency Rapid Recovery Solution, says that it’s risky to let high schoolers get involved with credit before they’ve developed financial responsibility. “If your kid understands how credit works and understands that any actions that affect their credit could have consequences for years down the line, then having a card could be a useful exercise for them. But if they’re financially immature, a credit card isn’t a good tool to teach them money management. In this respect the parents’ decision could affect whether or not their child is able to rent an apartment or buy a car later on. A compromise is to make them an authorized user on your card – you can let them use it but still retain control. Remember, if your child has a job, they might qualify for a card even without your approval, so it’s best to teach financial wisdom as early as possible. If your child asks for a credit card, consider granting their request on the condition that they take a course on financial literacy.”

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