August 6, 2015 at 6:25 PM EST - Updated July 2 at 8:05 AM
Tips for Keeping Teens Out of Credit Card Debt
The financial landscape can seem complicated for even the most seasoned among us, but for teens it can be particularly cumbersome. Teens are vulnerable to nefarious activities and puzzling concepts. These simple tips can help you to ensure your teen develops a good financial base of knowledge as he/she prepares for their future.
Explain your credit card experience with your teen. Teaching your teen financial basics is another area of parenting where you must be actively involved and committed. A teenager should be educated and experienced in earning, saving, spending and paying bills before he turns 18 and heads out on his own, either to college or the workforce.
Help your teen create a budget. Explain the importance of spending only as much as she has and of maintaining a savings account for emergencies. Encourage her to obtain a job, either earning money around the house or outside employment, so that she can spend and save her own money.
Open a checking account for your teen. Take them to the bank and show them the ropes. He can then learn the essential skills for writing checks and balancing a checkbook.
Hand over the debit card. Once your teen has worked with her checkbook for a few months and has shown you that she can be responsible with writing checks and managing the ledger, she should get used to paying for purchases with a debit card. It looks and feels like using a credit card, but is directly linked to her checking account.
Tips & Warnings
Encourage your teen to pay cash, use her debit card or write a check for as many purchases as possible. She will not spend as much and the temptation to spend more than she earns is taken away.
This information is not to be used as investment advice, but for informational purposes only. Republic Bank & Trust Company prohibits the dissemination, distribution or copying of this document without the Bank's prior written consent. Please consult your financial or tax advisor for further information. Member FDIC.