Teenagers may be new to credit. Parents need to give them the financial education and tools that will help them succeed. It is a wonderful gift to give financial responsibility and financial education that they will carry with them for the rest of their lives. A strong credit score will help your teen. Here are some ideas to get your teenager started.
Credit cards can be used to add a minor to the authorized user list
A credit card that allows you to add a child as an authorized customer can help you build credit before your child turns 18. All authorized users will be notified by the major issuers when they make a payment. This means that the child receives credit for the payments, even though it is not their account. This helps build their credit and allows them to get better cards as they age.
It's important to remember that a minor under the age of 18 can't open a credit card, but if you add your child as an authorized user, you'll be able to give them access to credit card benefits. Authorized users receive a card in the name of the primary cardholder.
One or two accounts to manage
Managing one or two accounts to build credit early in a teenager's life is a great way to demonstrate your child's maturity and responsibility. Saving a little money or opening a checking account will help your child learn about money management and give you valuable experience in the long-term. You can also allow your child to use the debit card. This will teach him how to tell the difference between a purchase that is necessary and one that you consider a luxury.
Many banks and credit institutions offer checking accounts to teenagers. These accounts usually have lower fees than standard accounts. You can help your teen learn about money management and reconciling accounts by opening a checking account. It is possible to become a cosigner of the account for your teen, which will make it easier for you to monitor their spending.
Spending and budgeting responsibly
It's not too late for teenagers to learn how to budget and spend responsibly. They can begin by utilizing a debit card, which allows them to pay with their own money. Late payments can be charged interest on credit cards. Credit cards are loans from credit card issuers. Budgeting is a great way to save money and keep your spending under control.
Setting goals can help your teenager think about long-term, as well short-term goals. Short-term goals can be saved for a car or worked towards a career.
Identity theft prevention
One of the most important tips for avoiding identity theft as a teenager is to be wary of online social networking sites. Teens don't hesitate to share their personal information with their friends. Their status updates can also be searched publicly. Identity thieves can use this information to gather data and create fake identities. Online updates could reveal the home address or location of a teen.
Although a teenager might not be aware of it, their information could still be used to commit identity theft. Thieves often target young people with clean credit reports. Because they don't regularly review their credit reports, they are more likely to be targeted. The social security numbers of teenagers are easily accessible online. Even close friends and family members could be identity thieves.