Can your high school student have a credit card?

Most credit cards designed for students were created for college students, but can a high school student get a credit card? The short answer is yes. The long answer would involve a lot of discussion!

As teenagers, many go out and get their first job, or earn income from allowances or childcare. It’s the perfect time for parents to help them learn the basics of money management; which is something that many families overlook; leaving graduating high school students to move on to college or the “real world” with very little knowledge of real world finance.

Just a few short years ago, not only was it nearly impossible to give a teenager a credit card, but you would be considered a little crazy to do such a thing! However, times have changed and there are several teen credit cards on the market that parents can use to help them learn the basics of financial responsibility.

Teen credit cards include features like parental controls and digital “allowances.” It may be sweaty to give your teen a credit card, but it’s a good educational financial experience for your teen, before it’s too late to help them become a financially responsible person:

Teach them about good credit. With so many adults today struggling to rebuild their credit or increase their income to make it easier to keep up with their monthly payments, it’s never too early to teach teens how to manage money. Teaching them at a younger age can keep them from overspending once they’re on their own. Nellie Mae claims that the average college freshman has more than $1,500 in credit card debt; and once a student realizes how easy it is to “get what she wants, now,” it becomes a habit to use it to buy the things she wants while in college. If the teen enters the adult world with strong money management skills, she is less likely to go into too much debt.

Your options. If you’re not worried about your teen building a credit history right now, and just want a way to teach them the basics of money management, you can look into a prepaid debit card with a Visa or MasterCard logo. Some of these cards may have annual fees or transaction fees, giving you another chance to show how using a credit card is not the same as buying with cash. You can also enroll your teen in a checking account with a debit card; or make him an authorized user of an account you already have, or open a new low-limit credit card account and make your teen the cardholder.

Give teens access to emergency money. As your children become teenagers, they are likely to start spending more time away from you and alone or with their friends. Sometimes they may need cash, if a car breaks down and they need to be towed off the road, or for long distance phone calls, for example. Having a credit card in your pocket will allow them to handle an emergency that requires access to money and may give you a little more peace of mind.

If you decide you’re ready to teach your teen the basics of money and credit management, be sure to spend some time researching the various options available before choosing an option. Regardless of which option you choose, you want to make sure you spend enough time with your teen and not expect them to figure out what to do with them on their own. Try using a service like Citibank’s Credit-Ed program: http://www.citi.com/us/cards/cm/student/index.htm