Card Smarts — Prep your teen for college with a lesson in credit spending habits.
Thinking of giving your high schooler a credit card? Go ahead, but don’t forget to add some lessons on smart credit card use, says Mary Beth Pinto, professor of marketing at Penn State Erie. “The only way to help these kids later on is if you train them now,” says Pinto. Start with a prepaid credit card and a helpful discussion.
How much money will be on the card and when will it be placed there? Have a set amount and selected date, which will help teach budgeting. No exceptions. Limits whining and insists on thoughtful planning and living with what one can afford.
Where does the money come from? It could be an allowance or money a teen earns. The key word here is “earns.” Just putting money on the card for a parent’s convenience accomplishes little.
Who puts money on the card? Parents — period.
To learn more, try kids’ finance games at www.cccr.psu.edu.
In 2008, the average college student carried $3,173 in credit card debt, according to a study by Sallie Mae.
Reference: Goodneighbor, Summer-Fall 2011