Teaching teenagers how to be financially responsible and how they can build their own credit scores to be great can be another side job of its own, especially if you, the parent, has never introduced your child to such matters. Letting your teenager acquires and handle loans affairs and a credit card without any guidance or advice can be very dangerous to your child. As a parent you can have your child get advice on how to handle credit from the staff at Lendgreen. Since this is literally new and unfamiliar ground for your teen. And the fact that he/she now has access to tremendous amounts of cash makes it even riskier as teens are known to be reckless with money. No matter how little or much it is. But even so, here are four tippers and indicators that will show you that your teenager is ready to handle his/her own credit card.
1. Honest about money
One way to know if your child is ready to handle a credit card is if he/she is always upfront and honest about purchases. Why not test them by giving them some amount of money an item and see if they will be honest about the item’s purchase? For example, if your teen tells you that he/she needs a school item, you can give him/her some money and set them a budget that they shouldn’t exceed. If they stay under the budget, then you know that they are ready.
2. Spending wisely
If you give your teen house allowance, or if he/she has a part-time job and is paid a significant amount, then they definitely have access to funds. But how do they spend this cash? Check if they set aside some amount for savings or if they blow it all away maybe even on the day that they get it. If you notice that your child is in the habit of spending all of his money on unnecessary things when he/she is paid his/her allowance or pay from his/her job, then you will definitely know that he/she isn’t quite ready to handle a credit card. If you have a reckless spending teen, then offering them a credit card will only encourage their already bad spending habits.
3. Keeping deadlines
How your teenage child deals with deadlines can also tell a lot about how he/she can handle being with a credit card. This step is quite simple. You can monitor whether your child constantly forgets or remembers his/her important homework deadlines or house chores and messages. Whether he/she keeps missing curfew deadlines. This information should reveal to you the likelihood of your teenage child handling a credit card.
4. He/she understands how credit works
If you are lucky enough to have a teen who understands how credit works, the better for you. Most people, adults included, only view credit cards as some free money thrown their way. But this is never the case, as you will eventually have to return this borrowed money. Having this kind of attitude can get you into some serious debts if not careful.
Having a teenager who knows exactly what he/she is spending, on what item, and how much they should actually spend, can seem like manna from heaven. These are the types of kids who will definitely pay their bills when they come up.
5. Responsibility checklists
You can also just set up a responsibility checklist and see how your teen fairs against them. Check for things like whether your teen shows a willingness to track his/her spending, exhibits saving behaviors, lives within his/her means, is responsible in other areas of life, shows discipline, etc. These points will definitely tell you whether your child is ready for a credit card or not.