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Ask any high school student you see shopping at the mall what is something they wish they had, and most of them will say a credit card. The others will say that want a higher limit on the card they already have. But when students make comments like those of the second group, it's a good indication that their parents have probably not prepared them for credit card use -- needing a higher limit means that they probably are unaware of the dangers and pitfalls of owning their own credit card. Teach Your Kids about Money Teens are very interested in being adults. Even though they are still in school, they consider themselves to be adults and want to do those things that adults do. One of those adult activities is to have that piece of plastic in their purse or wallet. But before parents give in and set their teenager up with a credit card, they need to have a very serious lesson about the dangers of credit cards. The best course of action for parents is to begin teaching children about money at a young age. The sooner they begin learning about money, the sooner they will begin to grasp the value of saving, spending wisely, and avoiding the use of credit cards. Many schools now are including courses on financial literacy, and there are many programs available for parents to enroll their children in that will help them learn more about money and credit. However, the best place for children to learn about these things is in the company of their parents. Taking your children to the store with a limited budget and allowing them to see how far their money goes is a good way to start. By the time they are in high school, you can help them open a checking account that has a debit card option. They can learn to use the card without the dangers of going deeply into debt. When their money is gone, it's gone. After they have proven that they can manage their money, you can open a joint credit account with your teen. This way they can actually experience buying things on credit, making the payments, and seeing how the interest eats away at their money. You can also monitor what the teen is spending his or her money on. The Dangers of Credit Card Fraud Before you unleash them with that credit card, you need to spend some time talking about a serious problem -- credit card fraud. Credit card scams are everywhere, and it's up to you to teach your teens before they get into trouble. Having a credit card is fun for them and makes them feel mature, but nothing will bring them back to reality faster than knowing that their credit card has been compromised and they have been scammed out of their money. That's a hard lesson for anyone to learn. Because of the dangers of credit card fraud, teens risk damaging their credit score early in life. Although it can be sorted out eventually, it's not a good place for them to start. Make sure they understand how to protect their card from the prying eyes of strangers. They also need to know that they should not trust their friends with that information either; although friends may not intentionally do something to damage your teen's credit, anything can happen. Credit Protection As your teen learns about using his or her credit card, you may want to consider getting some credit card fraud protection for the account. While your teen may be a truly responsible individual, he or she may also make mistakes -- it's a natural part of learning. Rather than have your teens penalized because of an honest mistake, consider offering some protection so that their credit report isn't damaged early. If it's a joint account, credit fraud protection will also keep your teen's mistake from hurting your credit as well. You can never start too early when it comes to teaching children about money and credit. Once they begin understanding the value of money and how to manage it wisely, you have helped them learn one of the most important of life's lessons. Joy Mali is an active blogger who is fond of writing articles on Finance and advising people to monitor their credit history to ensure a clean and error free report. Follow her on Twitter to know more on teach teens about credit card use as early as possible.
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