Question - You said in a recent column that you don't like the idea of credit cards for teenagers. But my 16-year-old son recently got his driver's license, and I have been thinking it would be a good idea for him to carry a credit card in case of an emergency. Would you make an exception?
Question - I got a credit card for my daughter by going to my credit union and opening a $300 secured Visa in my name, then adding her as an authorized user. This works for me. The main problem I had with a regular credit card is that the nice people at the bank could increase my credit line - and that I did not want.Answer - Dr. T would like to thank reader No. 2, above, for responding in part to reader No. 1's question.
In general, I wouldn't allow many exceptions to the no-credit-cards-for-teens rule. My column generated a lot of reaction, but nothing made a bigger impression on me than a TV interview I did on the subject.
First, the 20-something producer of the show told me her own tale of woe about running into credit problems when she used her parents' card: "I never saw the bills, never saw things itemized. It never occurred to me that you actually had to pay, that it's not just a cute little gold card."
Next, the 20-something young woman in the makeup department told me her tale of woe about how her parents "used to throw credit cards at me" rather than spend time with her. "It really messed me up financially as an adult," she said. "I feel strongly that young people shouldn't use credit cards."
Finally, the 30-something host told how, as a teen, she overbought on her mother's credit card, and asked for a job at the store to help pay the bill. When she got her first paycheck, she was shocked when she had to turn it all over to her mom - and still owed more money.
It's safer to keep teens on a cash basis until they've acquired the common sense and self-discipline to use credit wisely. If you think your children meet this description or if you have reason to be worried about an emergency situation, then credit could be in the cards. But put a limit on your kids' exposure.
For example, the secured card cited in the second response above requires a cardholder to deposit in a savings account a sum of money equal to the credit line. That guarantees money will be available to bail out your child if necessary, and emphasizes the point that credit doesn't come without a cost.