People have to start their financial learning at some point in their lives, and this usually starts when they are children or young teenagers. But what sort of financial products are good for teenagers, if anything at all? One on hand you need to teach them the value of money, but on the other hand they need some form of card or cash in order to start being independent. If you are unsure what type is right for your children, then here is some advice on credit cards for teenagers.
Stay away from normal credit
If you have a child, then you should really stay away from traditional credit cards, because these types of cards do not promote responsible spending. Although a credit card would allow a child to make mistakes about spending and learn from them, simply giving them a line of credit will probably end in disaster. You have no way of stopping them from spending the whole limit in one go, and they are putting you and themselves in debt.
Prepaid cards
Despite normal credit cards being a bad idea, there is a new type of card on the market that is being targeted at children. These cards are known as prepaid cards, and have most of the facilities of a credit card; except that you put money on the card in the same way you put money on a mobile phone. Instead of giving your child a credit card, you can put a certain amount of money on the card each week or month and then the child can use the card as they see fit.
Benefits of prepaid cards
The main benefit of a prepaid card is that it combines the freedom of having a card with the ability to control spending. This makes it ideal for parents who want to give their children a level of financial responsibility but still have the means to control the amount they spend and on what. By having a card with a statement, the parent can see exactly what their child is spending their money on and when. This is a very useful tool in helping to educate children on money expenditure. Also, prepaid cards are safer than having your child carry around cash, plus it also allows them to make purchases online.
Drawbacks of prepaid cards
Although many believe these cards are better for children than other financial products, there are still question marks over whether they are a good idea. Although they are touted as helping children to learn about finance, this can be done in other ways apart from giving out a card. Also, keeping track of spending is not always easy, as some of the cards allow cash withdrawals, meaning that they could spend their money on anything. Also, there is the danger that parents will put too much money on the cards, which will have the opposite effect on teaching children about money and simply make them believe they can spend what they like. Also, there are fees involved in these cards, such as an application fee and top up fees. Although these cards might be good for some families, you should think carefully about the benefits and drawbacks before deciding on whether or not you want your child to have such a card.
The majority of credit card companies including Visa and MasterCard, the two most well known credit card companies now offer the ability to apply online for one of the many versions of their cards available. This makes the process quicker and more convenient than ever. People who may not have bothered in the past because of the long wait and the feeling that they wouldn't acquire a card anyway can now take their chances and have verification back quicker than ever.
In addition to standard personal cards there are now specialized cards as well that cover all walks of life, including student cards, business cards and travel cards. Credit card providers still do the majority of their business through standard cards though, and these are available to anyone within the appropriate area. Be warned that most credit card companies, namely the smaller ones operate within and deal strictly with U.S customers, so if you're outside the United States many of these cards will not be available to you.
Getting approved for a Visa credit card or others requires a few things in most instances. You need to be holding steady employment, have a stable banking account, and supply a history of your credit report.
Initially you will probably receive early membership benefits like low or no APR, and no annual fees. You may also receive grace periods on interest rates as long as you keep your credit line in good standing.
Many cards offer cash back points or other rewards systems. These systems may vary greatly, and may only reward purchases through certain vendors or very specific rewards. You may want to look into the rewards offered by each company, and the ways to obtain them and determine which card makes the most sense with your lifestyle and likely purchases. Getting more points but only being able to use them on camping gear when you don't camp doesn't make much sense as an example. You'd be better off going with a company whose prizes may not be worth as much technically, but are more relevant to you personally.
Finding a card with built in fraud protection is important with the continuing rise of identity theft. Some cards will offer a 100% back guarantee, while others may only provide a portion of the fraudulent transaction fee back. Regardless of the fraud protection that comes with your card, you must take action the moment you suspect you've had your card used fraudulently.
In the event that you've been turned down for a card despite seemingly meeting all of the criteria it's likely that your credit report contains info that you may not even be aware of. Even the tiniest blemish, such as an outstanding $30 bill to a music club could cause credit card companies to get cold feet about giving you a line of credit or offering a . Obtaining a copy of your credit report and taking care of any problems on it should remedy the situation.
With all the information that comes into play when choosing a credit card company you may get overwhelmed by the info and find yourself unable to remember which card offered which benefits. Web sites that offer an online comparison page of numerous credit cards' fees, benefits and other info side by side can make this decision much clearer. If you decide to go with a less well known company, be sure to conduct some research on them first, through multiple avenues. Don't trust the word of just one random site, as the person operating that site may be an affiliate spewing rhetoric and false promises to get a sale. Sites with message boards and discussions taking place about the benefits and experiences they have had with each card are a great place to form an opinion about a company and their service.
Both Peter K & Eric Jilson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Peter K has sinced written about articles on various topics from Credit Cards, Debts Loans and Liability Insurance. Peter Kenny is a writer for creditcards-gb.co.uk Please visit us at and. Peter K's top article generates over 135000 views. to your Favourites.
Eric Jilson has sinced written about articles on various topics from Marketing, Credit Cards and Boxing. Knowledge is power - get more power and find out more about . Join us. Eric Jilson's top article generates over 3350000 views. to your Favourites.