Advantages & Disadvantages of Credit Cards for Teens

Credit cards are popular methods of payment because of their convenience-there's no need to carry around large amounts of cash, just one piece of plastic. They also allow you to purchase items over the Internet.

Building Credit

Part of your credit score is based on how long you have had credit and how reliably you have made your payments. Having a credit card when you are a teenager can help establish your credit so you can qualify for better rates on loans in the future.

Security

Having a credit card is advantageous because, if it is lost or stolen, you are not responsible for unauthorized charges when you notify the card company.

Education

Having a credit card as a teen should be a learning experience to help him understand how credit cards work. This experience can prevent him from burying himself in a mountain of debt later on.

Fees

Some credit cards have annual fees and most have charges for going over the credit limit or making a late payment. Some cards even have transaction fees each time you use the card.

Spending

It can be harder to restrict a teen's spending with a credit card than if you just give them a limited amount of cash. If you are a co-signer on a teen's card, you can be held responsible for the payments.

References

• High School Student Credit Cards
• Help Teens Learn to Use Credit