A look into teenage credit card statistics reveals much about teenage spending habits. The US based statistics show that people in their teenage years have significant credit card balances. They should not have large balances, because they have limited credit card needs. It only takes a short time for one to realize that their spending habits are becoming uncontrollable.
Though the statistics on teenage credit card debts gives unsettling information on how the teens perform in the credit cards arena, talking about ways of improving the statistics ratings is more important that talking about the debts themselves. Merely, talking about their habits does not help them in any way. We should focus on how to get them to change those habits that have significantly increased their credit card debt.
Ways To Better Teen Credit Card Statistics
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.
Teens must understand the real value of money. They should understand how much money costs in terms of person-hours and labor to receive it, and its appropriate use. They need to have extensive monetary and financial knowledge. A parent can for instance, ask their teenage child to maintain records on his pocket money expenditures. Alternatively, they can enroll them in money management courses at appropriate age levels.
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 teens prove they can do their own banking transactions alone you may want to consider a pre-paid credit card, before actually giving them a full credit card connected to their bank account. Pre-paid credit cards work well for teens and train them to that fees will accrue if they mismanage it. Having a pre-set spending limit on the credit card teaches limits and to know what to spend on and what not to spend on.
These are good and responsible approaches to teach teens life long goals for good financial spending; and keep them out of dangerous debt situations. This way teen credit card debt statistics will lower.