The rising number of Americans dealing with outrageous, out-of-control credit card debt leaves many parents wondering if their teen should be trusted with his or her own credit card. There are several advantages to getting your teenager a credit card before they leave home for college. High school is a good time to learn and exercise good credit card usage, rather than waiting until college, when they are out of parental control, to discover the joys, and possible pitfalls, of having their very first credit card.

Your teen should first have his or own checking account, before applying for a credit card. They should be aware of how to write checks, how to keep a check register and how to balance their account every month. These skills will be necessary for making credit card payments. In today's world, ensuring that they know how to make online payments using their checking account is also a good idea. Ensure that they are making their monthly payments on time. Keep a close eye to see that they are not accruing a higher balance than they can pay in full every month. A good credit history can not be built on late payments, or by reaching the maximum credit limit.

You may want to start your teen off with a prepaid credit card. This will ensure that they do not accrue a large balance, while teaching responsibility for making payments, setting a spending budget, etc. Once she has learned to use the prepaid card responsibly, make the switch to a low-limit credit card. Be sure to review and discuss your teen's spending habits and decisions, helping her to learn the difference between a responsible charge and a bad one.

In the event your teen should charge more than he can pay, you'll have to decide as a family what to do about the situation. This decision should probably be made prior to giving your teen a credit card, so that the boundaries and expectations are already in place. This allows for panic-free decision making on mom and dad's part, and lets the teenager know exactly what will happen should a large charge or lack of funds prevent a full payment. Catching and correcting poor spending habits early on, and making your teen responsible for his spending, will lead to the formation of a responsible credit card user in the future.

A teen can establish a good credit history early on, making applying for student loans, car loans and other forms of necessary credit easier and less stressful. Having a good credit history can set your teen up for greater success in the "grown up" world of finances, too. Lower auto and homeowner insurance premiums are also available for those with good credit ratings. The benefits of having a credit card while still being a teen at home can help to build your teen into a responsible, financially prepared adult consumer. Teaching that a credit card is a convenience and a privilege, not an income extension or source of unlimited spending can have great payoffs in the future.