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Student Credit Cards: Teen's Dream Come True or Parent's Worst Nightmare?

Ladies and gentlemen - tonight's tag-team match is for student credit cards. In one corner, we have Mr. and Mrs. Johnson. In the opposite end of the ring is eighteen-year-old Timmy Johnson and his big sister Alli. Who will prevail? Let the battle begin!

Oh God Help Us

The words "student credit cards" have stricken fear into the hearts of millions (of parents that is). Junior just learned to drive. Now he wants to carry plastic (and with today's gas prices, who can blame him?) Is it a good idea, or financial disaster waiting to happen?

That, my friends, depends on the parents and the teen in question.

Kinda Like a Gun

Student credit cards are kind of like a weapon. I know, that's the last thing you needed to hear, but it's true. Student credit cards can be a valuable tool of teaching or a horrible tool of destruction. The same card that teaches one teen financial responsibility can put another into premature financial despair. What separates the two?

Proper Planning

Student credit cards can definitely be a valuable teaching tool in finance and responsibility. But that's just it. Credit cards are a "tool'. Not a be all end all answer to your teen's financial needs. Instead of fighting with your teen as to whether or not he or she should have a card, you need to teach your child what to expect from a credit card and how to handle one properly. Set spending limits and lay out rules as to what acceptable purchases are and are not.

And make sure the first card you give your teen isn't one with a $5000 credit limit. If you want your teen to use an account with a higher limit, call the credit card company and ask if they can issue a restricted-limit card associated with the account. If they can't, apply for a separate account for your teen to use. You don't want to put that much temptation in front of someone who can't possibly comprehend the financial repercussions of abusing it.

And for goodness sake, make the kid pay for what he or she buys with the card. Nothing teaches irresponsible spending more than giving a kid plastic while mommy and daddy are footing all the bills.

Remember, student credit cards are something that can help your child prepare for his or her financial future, but whether or not they take wisdom away from the lesson will depend on how much wisdom you put into it.

Article Source: http://www.newagelivingarticles.com

For more tips on credit cards (including tips on credit cards for teens), saving money and avoiding getting taken, check out CreditCardWhizKid.com, a website that specializes in providing credit card tips, advice and resources.

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