7 Tips for Teenagers to Use Credit Cards Responsibly

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The following article is a guest post.

Today, parents encourage their teens to use a credit card to get a better idea of finance management.  However, this act of goodwill can cost your parents dearly if you make a habit of going into a shopping frenzy.

We are not saying you shouldn’t get a credit card. Instead, we are advising you some useful guidelines you should mind to keep yourself and your parents out of trouble.

1. Get One If You Need It.

You should only get a credit card if you need it, not because of your friends’ one. It’s understandable you get peer pressure, and you want one. But this shouldn’t be your only reasons. You need to learn how these things work before you get one.

2. Think of Them as Cash.

Credit card offers a lot of benefits, and you may believe they are easy to play money. This is not a healthy track course, and you have to explain your purchases with plastic. You don’t want to get into debt while you take money out of your pocket.

3. Get a Checking Account.

If you want to get an account, you should get a checking account, and obtain a checkbook. It’s not something you will boast about, but it teaches you something about budget basics. 

If you want to get ready for a credit card, you better start with a checking account with a debit card.

4. Show Bills/Budget.

This might scare you but don’t worry; it will help you become responsible. If you are interested to get a card, get an account and step into the practical world. Then take a good look at your bills, expenses, and monthly budget. It will get you a good idea about adult finances.

You have to sit down, take a deep breath and see the cash flow cycle. Afterwards, you should make a teen budget worksheet which will help you track your finances.

5. Co-Signer.

If you are under 18, and you want to start your banking account, then you are required to have a co-signer to sign your application. This means your account is tied to your parents or a guardian. This is an incentive which lets your adults educate you about banking.

This will help you develop a good habit, and learn the basics of having a banking account.

6. Good Terms.

You need to take your time and perform a brief research. You have to find the best credit card with low-interest rate including late fees, annual fees, and no hidden/extra charges. In case your spending limit is low, for example, $1,000, then you are better off with a starter card.

7. User Guidelines.

You need to set certain rules for yourself when it comes to credit card usage. You need to discuss the purchase and payments you are going to make with Small Business Credit Cards and consult with your parents. Establish a restriction of how much you will spend every month, and how you are going to do it.

You need to keep track of expenses and let your parents know if you make any big purchases.

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