“If I only knew then what I know now.”
This statement is especially true when it comes to credit. Do you remember getting your first credit card? Did it feel like a license to spend money you didn’t have? Then before you know it, the rude awakening arrives in the mail: the credit card bill, with interest and penalties. Here’s how to ensure your teens don’t fall into the same trap.
Welcome to Credit 101
Learning about how credit works can be confusing for a young person because it is a bit contradictory. As soon as your teen is making money at a part-time job, they should apply for a credit card, to build up a healthy credit rating and set themselves up for a strong financial future. However, they should not be living on money they do not have. The best way to build good credit is to apply for a secured card. There is no risk of default to the lender on this card because it already has money on it. But your teen will be learning to make regular payments and building a good credit rating for doing so. You can also make your teen an authorized user on your credit card.