Why Teenagers Should NOT Be Allowed to Have a Credit Card

Smart Money Debate - Why Teenagers Should Not 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 Jana’s post: Why Teenagers Should Be Allowed to Have a Credit Card. And then let us know which argument was more convincing!

This post was written by Melissa Dawson, creator of Living with the Lioness and Hubpages contributor. After years of struggling to resolve her own issues with money as it relates to self esteem, she is proud to be debt free, content with what she does have, and more concerned about maintaining healthy supportive relationships than owning things.

When I heard the debate topic “Should teenagers be allowed to have a credit card?” I knew right away that my instinctive response was “No.” But first, let’s clarify that for this discussion “teenager” refers to anyone between the ages of 13 and 18, and “credit card” refers to any kind of charge card, including ones for gas stations and department stores for example.

In the interest of full disclosure I need to let you know that when I was in high school the idea that my parents would have let me have my own credit cards would not have even been an option. I can only remember two occasions when I was even allowed access to my parent’s card.

What Does Having a Credit Card Really Mean for a Teenager?

It is important to note first of all that technically it is not legal for any company to offer debt to someone under the age of 18. Most banks will not even open an account for anyone under the age of 18 without a parent’s permission and their name being on the account. This means is not that easy for a teenager to have their own credit card. The most common way to get around this is by having parents as the primary borrowers with the teenager as an “authorized user.”  What this actually means is that you as the adult or parent have just assumed another financial liability.

In some cases it also will mean that you will not know what, or how much, has been charged to your card until the monthly bill is either received in the mail or posted to your online account. Not every card will have the function of letting you see daily activity during the billing cycle.

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Why Teenagers Should Not Be Allowed to Have a Credit Card: Reality vs. Peer Pressure

Credit card pressureWe worry about the effects that peer pressure will have on teenagers when we’re talking about drugs and alcohol – so why wouldn’t we be concerned about its effect on a teenager’s use of a credit card? It’s so much easier for teenagers to succumb to peer pressure, especially in matters of money. After all, if their friends all have that $150 sweatshirt then shouldn’t they have it as well, so they can fit in?

Most teenagers would do anything rather than risk the humiliation of being “different” – which is often the ultimate curse in high school. And with access to Mom’s credit card, a teenager can take action on the desire to have all the latest clothes and/or fashionable accessories. A better path would be to help them learn the value in being frugal and in finding their own style without going into debt.

Why Teenagers Should Not Be Allowed to Have a Credit Card: “Real” Money vs. Debt

Shopping with credit cardsFor many adults using a credit card does not feel like spending “real money” – so why would we think this would be different for a teenager? After all it only takes a swipe of a magnetic strip and they then have the consumer high of walking out with a bag from that “In” store. If many adults don’t fully realize that the $100 purchase they just made with a credit card could potentially cost them $200 or more if it is not paid off in full each month, can we really expect a teenager to?

Since a large number of teenagers do not have jobs all year long, presumably because they are in school, where would you, as a parent, think the money will come from to pay off the card that your darling son just ran up the balance on treating all his friends to the latest movie as well as paying for everyone’s drinks and snacks?

And as the account is in YOUR name, and not theirs, it is your credit history and rating that will take the hit if and when your child runs up hundreds of dollars in charges before you even realize there is a problem. While you may be able to return some items in that scenario – there are a lot of things you will not be able to dispute or get credit for: Gas, meals, movie or concert tickets.

However for the sake of argument, let’s say you had co-signed an application for your child and they do have a card in their name alone. Until the age of about 25 most young people have not fully developed that part of their brains that can realistically see future consequences and consider possible ramifications. Getting into trouble with debt at a young age can shadow a person for years, and in ways they probably don’t fully appreciate. Renting an apartment, getting a student loan, buying a car and even applying for a job – more and more these decisions are made by people who have run your credit history and made a judgment call based on that information.


I think a better way of teaching kids about money is to start them a lot earlier than 13. Get them in the habit of setting aside a percentage of any money they receive into a savings account: such as birthday cash from grandma, that extra $20 from Uncle Matthew or the $15 your neighbor gave them for shoveling their driveway.

Use the word “budget” around your child. Not in a way that will scare them or make them feel unsafe – they should not worry that Mommy and Daddy cannot pay the electric bill – I do not see that as a child’s job. But neither should you hide all discussions of money from your kids. I think it is acceptable to say “I know you want to go to the water park, but you also said you wanted to go with your friends to the movies next week. Our budget will allow for only one of these events – which one do you want more?” Children shouldn’t grow up thinking that just because they want something they will always get it. And Mom and Dad are not an endless source of income for their amusement. Of course this only works when you are able to exercise the same control with yourself. Because what children really learn from are your actions. So make sure you are living your own truths before trying to impose them on your kids. And don’t give them a credit card.

So… do you agree or disagree?

Image 1 by B Rosen; Image 2 by Paul Keller

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

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  • I wholeheartedly agree! Not only should they not have credit cards, why in the world would they even need them? They’re teens.

    I know someone is bound to say but it will teach them financial responsibility…no it won’t. But being a parent and teaching them to avoid debt, balance a checkbook, pay their bills on time, and manage a budget will. By example not by words alone.

    Most adults can’t even handle credit cards. Kids have an entirely different view of the world, and aren’t quite ready for the irresponsibility and temptations that credit cards provide. And no they don’t need to “build” their credit score either. That’s why America is in the financial trouble it is in. People were told to build their credit score and now have debt coming out of their ears.

    My Smart Money Debate, on you guessed it — credit scores — is publishing tomorrow. For those of you that disagree with this author, prepare to throw stones at me because I completely challenge everything you’ve been taught about credit scores and I do so with confidence and experience to back me up.

    Great article Melissa Dawson! I wish i had seen this debate earlier.

    Brad Chaffee