Why Teenagers Should Be Allowed to Have a Credit Card

Smart Money Debate - Why Teenagers Should Be Allowed to Have a Credit Card

Welcome to the 2nd-ever Smart Money Debate at ReadyForZero! To see the other side of this debate, read Melissa’s post: Why Teenagers Should Not Be Allowed to Have a Credit Card. And then let us know which argument was more convincing!

This post was written by Jana, author of the wonderful personal finance blog Daily Money Shot, where she discusses money, family, relationships, pop culture, and everything in-between. You can also find her on Twitter and Facebook.

Should teenagers be allowed to have a credit card? That’s a good question, and one that I spent a great deal of time thinking about before I came up with my answer. I went back and forth, debating with myself (which makes for a good time. And some interesting conversation) before I decided that yes. Yes, I think teenagers should be allowed to have a credit card (I will pause for a moment so that you can scream at your monitor/phone/tablet about what an idiot I am).

Now that you’re done shouting at me, please take a moment or two to hear me out.

I should qualify my answer by disclosing that I got my first credit card when I was a teenager. Although I did not apply and receive my own, I was added as an authorized user on my parents’ card, in the event of an emergency when I was driving my sisters around. So perhaps my answer is a bit biased, but I assure you it still makes the most sense.

Why Teenagers Should Be Allowed to Have a Credit Card: Personal Responsibility

Credit card powerI will be the first to admit that I felt a tremendous sense of power and grownupness when my parents handed me that credit card. But like Spiderman’s Uncle Ben says “With great power comes great responsibility.” He’s a smart man. You see, even though I had that credit card in my wallet, I knew I had to be extra careful about what, if anything, I purchased.

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Knowing that my parents were going to see the bill (and the fact that I would have to own up to every single purchase) made me learn how to control myself around the credit card. Not only that, I even went so far as to ask my parents before I used it. I didn’t want there to be any surprises when they got that statement (especially after the long distance phone bill debacle of ’95). I knew that I had to take responsibility for anything I did with that card, including losing it, and that made me even more cautious.

In the right hands, a credit card can do wonders for teaching a teenager self-control and practice personal responsibility when it comes to purchases – as long as the parents work with the teenager on those skills.

Why Teenagers Should Be Allowed to Have a Credit Card: Understanding Real Money vs. Debt

Credit cards vs moneyAt first, understanding that the credit was, in fact, real money was difficult for me. Swiping the card or giving the numbers to the call center at Ticketmaster was just so easy. However, eventually my parents explained to me that, yes, the money that gets spent is real and yes, we need to pay it back.

If my memory is correct, I learned this lesson when I offered to buy concert tickets (this was how I spent a majority of money when I was in high school) and my friends gave me cash for their tickets to give to my parents so they could pay the bill (as nice as my parents are, they did not enjoy footing the bill for concert tickets). At this point, my parents explained to me that although we can use the credit card for purchases, the credit card company demands payment (on time!) and we are obligated to pay them back.

This is an important lesson for a teenager to learn. It’s the first step towards understanding that credit cards are real money, not fake Monopoly money, and that someone can incur huge amounts of debt by not following the credit card company’s rules (whether that teenager chooses to listen is an entirely different debate).

Why Teenagers Should Be Allowed to Have a Credit Card: With Certain Limits

Let me be clear: there are almost no circumstances where I think a 14 year old should have a credit card in her name. But an 18 year old? Well, that’s a different story.

Although it’s only 4 years, the development that occurs in those 4 years makes an 18 year old more able to make rational, less impulsive decisions than a 14 year old. It is easier to sit down and talk with an 18 year old (or 17 year old) about how to use, and not use, credit and the chance of that information sinking in actually register. I know for me, there was no way I could have handled having a credit card when I was a freshman in high school. But by the time I was a senior, I had grown up a lot and was able to handle the limitations my parents put on me.

That said, I did not have my own card. I was an authorized user on my parents’ card. I think this is a practical way for a teenager to learn the ins and outs of having credit, particularly if the parents make the child responsible for footing the bill for her own purchases (like I did. My parents covered certain things but others I had to pay back myself. Mostly in the form of free babysitting for my sisters).


I will concede that not every teenager should have a credit card. Then again, neither should every adult. However, before automatically determining that a high schooler can’t handle that piece of plastic,  the adult guardian in that child’s life needs ask some questions:

  • Will she be wise and not spend frivolously, causing the adult to go into debt?
  • Will she succumb to peer pressure and buy those $70 jeans?
  • Does the teenager acknowledge that money spent on a credit card is real money?
  • Will the teenage be able to handle the responsibility that comes with a credit card?

The answers to those questions will determine if a teenager can have her own credit card. Although it’s entering into dangerous waters, it is possible to put that piece of plastic into a high school student’s hand (or wallet), and have her learn valuable lessons that could impact her financial future in a significant way. It’s easy to say that all teenagers are irresponsible with money and can’t handle it, but speaking as a former teenager in charge of a credit card, that’s simply not true.

So… do you agree or disagree?

Image by Wimena Kane; Image 2 by 401(K) 2012

Update: We’re going to link to blog posts responding to this debate (if you post one, let us know).

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  • redwagon

    I’ve got to side with Jana on this. Should EVERY teenager be allowed a credit card? No. But with proper guidance it can be a great learning tool.

    • Good point – it certainly depends upon the individual and whether they can handle the responsibility.

    • Jana @ Daily Money Shot

      Exactly! Parents need to be involved in educating their kids about how to use a credit card responsibly. Whether the kid chooses to listen is another story…

  • Dakota

    I agree Jana. When I started driving my parents added me as an authorized user, in case of emergency. I never used the card with out approval from my parents. They explained how it worked and it wasn’t free money, but just a way to manage cash flow and you paid them off every month.. That is the way I still use CC’s today.

    Now my younger brother proves the point it isn’t for every kid. He was much more likely to go shopping with mom & dad’s card.

    • Interesting how you both responded differently to the responsibility! How did your parents handle that?

    • Jana @ Daily Money Shot

      It’s interesting. My little sister and I are both financially responsible yet my middle sister is…less so. I wish I could figure out what it is that makes siblings who were raised the same so different.

  • marigold

    What about starting a teen out with a prepaid card. Paid by their savings, of course. Then the connection between the real, earned money and the use of the card is crystal clear. Later, perhaps if they have a job, they could try the “pay later” credit card.

    • Jana @ Daily Money Shot

      This is actually a pretty good idea, and one that many parents can employ. It’s definitely a fair compromise and gets the point across!

  • I’m late to the debate and this probably will not surprise anyone that
    knows me but we will not be giving our kids a credit card. In fact, we
    are teaching them that they do not even need one at all. If you want to
    know what we’re teaching our kids about credit scores you will love my
    debate on credit scores publishing soon on this site.

    Of all the people that say they would let their kid have access
    to a credit card I wonder how many are having or have had trouble with
    credit card debt themselves. I personally have been in conversations
    with people about this and they of course would argue with me for days
    about why their kid is different. I simply asked one question.

    “How much credit card debt do you currently have?”

    What kids see their parents do matters more than a quick
    parenting tip about managing credit card debt. I’m sure this does not
    apply to everyone but it might be interesting to know that of the people
    I had this conversation with almost all of them currently had credit
    card debt or had trouble with credit card debt at one time. Certainly
    not a scientific poll I admit, but still interesting.

    My next question was “did you have access to a credit card(s) as
    a teen?” Some, not all, said yes. Not really sure what that says
    because there are so many factors for individual cases BUT I think it’s
    safe to say that most adults have proven they can’t handle credit cards,
    so why do they think their teenage kid who is so impressionable can?

    Just an observation from a guy who hates debt and sees no point
    in credit cards or credit scores for that matter. My teens will learn
    how to manage cash and probably a checking account with a debit card but
    no way will I ever give them access to what I believe to be a major
    financial problem in today’s society.

    To be clear that’s not a judgment on anyone who would, it’s just one
    mans opinion. 😀

    Brad Chaffee