Getting Your Teen Ready for Credit Card Deal
Have you heard that credit card deals sometimes lead to suicide? Even best credit card deal can be a deal with death if it is managed with unskillful hands. Your plastic will most certainly play against you if you abuse credit cards basic laws and one day you may find yourself completely destroyed.
That's a frequent case with teenagers who are an easy game for credit card companies in their search of extending credit card market. It's a deplorable fact that money lenders are so greedy that they easily issue a credit card for teenagers under 16!
On the other hand, it's not difficult to understand young people's desire to carry in their pockets a little wonder-working plastic with credit rewards and lots of bonuses arousing everyone's envy. There's one but big "BUT", however. Youngsters do not know or don't want to know the price of possessing a credit card or rather they are sure that it is free.
It's the task of caring parents, if they want to prevent their children from early financial crash, to explain to their kids what the credit card is and to teach them to use it properly. It must be admitted, though that with the generally low level of credit education in the masses, parents find themselves perplexed as to how to communicate credit card basics to their children in an easy and, at the same time, true form.
The only way out seems to be to train a kid to use credit card in practice. But, isn't it too unwise and risky to give a silly and imprudent yet kid a real credit card to train on? It would be just destructive...
With all this in mind, Visa and MasterCard International offer credit card alternatives or "trainers" as they are called. These alternatives function like a credit card of full value but they carry less risk of making your kid deeply indebted.
If you are a parent seeking a plastic for your child, keep the following credit card alternatives in mind. They will help you both - to educate the kid and to avoid paying off his or her debts as a result of bad spending ways and irresponsibility.
Before you handle the "trainers" into the inexperienced hands, however, do homework and arrange a preliminary talk. You need to make it clear that credit card is no way free money. It is just a temporary substitution of it to rid your kid of the ever bothersome cash in the pocket.
Your child needs to know it beforehand that the amount he spends on the card will have to be repaid with interest and if it is not repaid on time and in full, credit debt will become his nightmare which will ruin the future eligibility to get a house loan or even find a job.
So, what are the alternatives?
First, you can present your child a debit card (pre-paid, re-loadable) which carries all the features of a standard credit card but without imposing interest as the money is deducted from the account straight away.
Second, you can make a joint credit card account with your child and it means you both are responsible.
Then, your child can open a saving account with a bank and be issued a credit card tied to it. It is a full-fledged credit card but, offering only limited credit ($300-$500), it will not threaten your kid with great credit debt.
And the last variant. You can make your child an authorized user and be responsible for all his debts if you wish to. But remember that your own credit rating is put at risk as the kid still feels free of any responsibility.
All these alternatives will prepare your kid for the first regular credit card deal with all the proper interest rates, fees and other credit card charges to be responsible for.
