Looking at the rising debt with teen spenders makes us want to take a look at accurate statistics to really see what's going on here. Statistics show that, teen debt is almost as high as adult debt and looks almost identical. Teen credit card spending records indicate that they have a pretty stellar balance on their credit cards. We wonder why since most teens have limited income means to pay the balances off in full.
These teen credit card debt statistics give a strong and alarming picture of how teens understand the use of credit; and the irresponsible habits they are forming with regards to credit. As such, it is imperative that we learn how to better educate teens in the proper use of credit cards, and help lower the number of teens carrying large balances on their credit cards.
How Should We Achieve The Lowering Of Teen Credit Card Debt?
Before handing teens a credit card, parents should think about whether their teen child has finance managerial skills. Obviously, teens who are trained about saving, have good spending habits and refrain from impulse buying, are better financial managers than those who are not. These lessons will stay with them through their teens and even their adult life. If the child did not get enough training, the parent should start tutoring the child about credit cards and the dangers of a poor credit rating and credit score before handing them a credit card, not after. Unfortunately in today's world, parents are not guaranteed that training their teenagers will stop them from acquiring bad credit card habits. Monitoring needs to be put in place too, at least until their teens good credit usage patterns have been established, and trust has been built in this area.
Teen credit card debt can't be improved without really giving teens complete information on the value of money and teaching them how to use money and credit wisely. Education sessions should be given to teens on managing their money and overall finances. These sessions could start teens off by having them make a written account of their finances, beginning with their allowance. This education must be tailored to their level of understanding and maturity. As we know, teens don't think the same way as some adults do regarding the management of money.
Next, open a bank account for the teenage child and teach him the basic aspects of managing the account. Let them learn about getting into debt and what bad debt is. If you are satisfied with the way they manage their bank account, debit cards could be a next step for them. They are much easier to handle than credit cards.
Once your teens prove they are at ease working at handling the bank transactions thru debit cards, the parent could consider getting their teen a pre-paid credit card. This type of card limits the amount of debt that they can accrue within a specific time. For example, the card could have a limit of $300, or an amount that the parent knows the teenager needs during a particular period of time. With the limit credit cards, you can teach the teens how to use their credit cards appropriately without undo worry.
Teens should really pay attention to their spending habits because they could, obviously, have a tendency to get out of hand. Teens should seriously avoid monster fees adding up from overspending their credit cards, as this could haunt them for life if they are not careful. Educating our teens on financial responsibility should be done step-by-step, to make sure they are clear on managing their finances and using credit and debit cards wisely.
These teen credit card debt statistics give a strong and alarming picture of how teens understand the use of credit; and the irresponsible habits they are forming with regards to credit. As such, it is imperative that we learn how to better educate teens in the proper use of credit cards, and help lower the number of teens carrying large balances on their credit cards.
How Should We Achieve The Lowering Of Teen Credit Card Debt?
Before handing teens a credit card, parents should think about whether their teen child has finance managerial skills. Obviously, teens who are trained about saving, have good spending habits and refrain from impulse buying, are better financial managers than those who are not. These lessons will stay with them through their teens and even their adult life. If the child did not get enough training, the parent should start tutoring the child about credit cards and the dangers of a poor credit rating and credit score before handing them a credit card, not after. Unfortunately in today's world, parents are not guaranteed that training their teenagers will stop them from acquiring bad credit card habits. Monitoring needs to be put in place too, at least until their teens good credit usage patterns have been established, and trust has been built in this area.
Teen credit card debt can't be improved without really giving teens complete information on the value of money and teaching them how to use money and credit wisely. Education sessions should be given to teens on managing their money and overall finances. These sessions could start teens off by having them make a written account of their finances, beginning with their allowance. This education must be tailored to their level of understanding and maturity. As we know, teens don't think the same way as some adults do regarding the management of money.
Next, open a bank account for the teenage child and teach him the basic aspects of managing the account. Let them learn about getting into debt and what bad debt is. If you are satisfied with the way they manage their bank account, debit cards could be a next step for them. They are much easier to handle than credit cards.
Once your teens prove they are at ease working at handling the bank transactions thru debit cards, the parent could consider getting their teen a pre-paid credit card. This type of card limits the amount of debt that they can accrue within a specific time. For example, the card could have a limit of $300, or an amount that the parent knows the teenager needs during a particular period of time. With the limit credit cards, you can teach the teens how to use their credit cards appropriately without undo worry.
Teens should really pay attention to their spending habits because they could, obviously, have a tendency to get out of hand. Teens should seriously avoid monster fees adding up from overspending their credit cards, as this could haunt them for life if they are not careful. Educating our teens on financial responsibility should be done step-by-step, to make sure they are clear on managing their finances and using credit and debit cards wisely.
About the Author:
Tina T Willer,MBA has written articles & books on Personal Finance, Investing, Stop Your Foreclosure & more. Click on the highlighted words to RECEIVE your FREE Book "Repair Your Credit & Increase Your Score Fast". These proven techniques can better your credit, credit score & report quick.
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