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Teen Credit Card

August 4th, 2019 at 07:29 am

I mentioned in my last post that we got MM(16) a credit card for the convenience factor.

I was just so behind and so much I wanted to touch on, but I did want to elaborate on this today, now that I think about it a little more.

Firstly, I didn't particularly have a discussion with MM about this. The discussions have already been had, long ago. I remember my kids being genuinely horrified, when they were 8 or 10, when they learned how most people use their credit cards. I am guessing that is mostly genetic. We both come from a long line of extreme savers. I just don't think it needs to be said out loud. MM in particular is a math whiz. I don't need to explain to him why it doesn't make any sense to carry a balance on a card with a 15% interest rate.

I did tell him that I set all my cards on a monthly cycle (1st through 30th) and that I pay them off the first of every month. & suggested he get in that habit. You know, in the old days we waited for the bill to come in the mail. But this is the internet age. I told him to put it on his calendar and just be done the first of every month. It will be a good habit for him to start.

The other thing that came up is that this credit card has a 0% interest rate for 18 months? MM asked me why he didn't just borrow against the card and leverage his savings account. I told him he could do whatever he wants. But I kind of felt we were starting with the training wheels and I'd like to take them off more slowly. I think MH and I both talked some sense into him. But that's my kid. I am trying to start at A and he's already jumping ahead to Z. (I did tell him that the catch is you have to pay off within that 18 months, or they will backcharge the interest probably).

It will be the same for my other kid. MM was literally born "0 going on 5" and you throw in the math whiz factor, and that's where he is. (So he's now "16 going on 25.") My other kid? He is way way way into economics. I have often said, "I don't know if he's going to be an actor or a hedge fund manager." Literally. He's the one who was always trading his lunches for something better. It blew his mind when he realized the high value of chocolate milk in the lunch room. So he'd start trading for milk first, and then trade for something more substantial. I actually would have more expected him to leap on the 0% leverage. Is just how his mind works. So though they are very different in their underlying personalities, I think the end result is about the same.

6 Responses to “Teen Credit Card”

  1. CB in the City Says:

    My grandsons, who are 12 and 9, have debit cards. I think it's a great way to ease them into the world of electronic money. Maybe in a few years they will have credit cards, too!

  2. MonkeyMama Says:

    Good point CB. I have always been thrown off how fearful people are of credit cards and so on. We live in such an electronic world any more. I think it's better to just teach them how to manage in that world. & I know my parents giving me a credit card at 16 is a *lot* of why I've never had any problem managing electronic money.

    The minimum age for authorized users is often 13. I would have started sooner if I realized. I actually really dislike debit cards but I thought it was the only option under age 16.

  3. fireandi Says:

    I'm glad you're teaching them about credit cards. My parents didn't. They never used credit cards, and they didn't think it was necessary to teach my sister and me. Maybe they didn't know how since they didn't use CCs themselves. Anyway, it really screwed my debt up. I went kind of nuts when I was young with the cards, and ended up paying for it up until this year. Thankfully, about the age of 27, I realized how horrible they were and I was able to guide my little sister. She has not had any significant debt as a result.

  4. rob62521 Says:

    It sounds like you have raised your kids well and they understand money, finance, and debt. Bravo. So few kids and adults really understand money.

  5. mumof2 Says:

    Credit cards in australia can be hard to get and I don't even think they give them to people under the age of 18...I like debit cards you only spend what you have...neither of our girls have a CC and don't want one...we don't see the need for them...my question is if he has the money why is he using a CC to purchase things??

  6. MonkeyMama Says:

    @mumof2 - I prefer credit cards for several reasons. Mostly due to the fraud protection. No risk of someone draining our bank account if they steal our card or card info. It's also an easy way to build credit history. (Which is important for us because we are otherwise very anti-debt. Us adults have only ever had "paid off monthly credit cards" and a mortgage. I don't expect my kids to be building credit with student loans or car loans). I don't know another way to build a credit history without carrying a loan balance.

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