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Teen Credit Cards: Teaching Tool or Pointless Plastic?

A common objection to letting teens use credit cards is that they won’t grasp its relation to actual money. However, that objection is nearly moot in today’s world of online payment systems and virtual wallet services, where you pay for your purchase through your cell phone.

Secured and pre-paid credit cards are a safe way to teach a teenager how to manage credit in the future; safe because the teen can’t spend – or be charged double-digit interest on – money she doesn’t have.

Most major financial institutions offer secured and pre-paid credit cards, and some cards provide a way to begin building a credit history for a teen. Note: Pay careful attention to the details to ensure the card you’re considering offers credit-building features for your child.

Our society now carries plastic cards the same way we used to carry cash, and virtual wallets have removed us even further from our green. “Cold, hard cash” may become an obsolete expression in our lifetime, so raising children to understand its relationship to their financial health is becoming more and more difficult. Will your teen be capable of conceptualizing the ebb and flow of her bank balance? Well, she’s got to start sometime! Do you want it to be at home where you can keep an eye on her? Or away at college?


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