4 Ways Parents Can Help Teens Manage Student Credit Cards
What is one common problem among teenagers today? Well, most young people these days find it hard to control their spending. Once they are given their very first credit cards, they cannot seem to resist the urge to immediately buy the items they like. They swipe their way into malls and shopping centers, purchasing the latest electronic gadgets, the trendiest clothes and accessories and other merchandises that appeal to them. And because of impulse buying, these teenagers eventually end up with large debts that will prove very difficult to pay off.
This is the very reason why parents have crucial roles in training their kids manage their student credit cards responsibly. After all, the way their kids handle their finances and credit accounts today will determine how financially-stable and independent they will become when they grow up.
So what should parents do to help their teenage children succeed in managing their cards wisely? We have listed below some pointers and tips that parents can employ to achieve such goal.
Tips on Managing Student Credit Cards
1. Help your children understand the basic concepts of interest rates and fees. Some teenagers are only concerned over the price tags they see on the items they would like to purchase. Most of them are unfamiliar with the rates of interest as well as the fees charged on their plastic cash. This is the reason why parents must spend some time to help their young children understand what these costs are all about. Parents must patiently show their kids how rates of interest and penalty charges can cause a small card debt to balloon out, if not managed carefully. This way, their children can avoid accumulating large financial obligations on their first credit lines which can compromise their chances of getting approved for future credit accounts.
2. Distinguish a need from a want. Some teenagers cannot seem to identify a need from a want. So, it is the responsibility of the parents to help their children distinguish the products and services they really need from the items that they can live without. In so doing, they can help their young children avoid running large credit balances on their accounts.
3. Manage your accounts wisely. Parents also need to provide their children helpful tips and pointers on how they can responsibly handle their student credit card. They need to explain the importance of constantly paying their bills in full and on time each month and how this habit affects their standing. Not only that. Parents should also emphasize that by employing sensible money and spending management techniques, their children can avoid paying huge interest, fees and additional charges.
4. Devise a personal budget. Budgeting is an important life lesson that each one of us must learn. This is why parent are encouraged to teach their children this vital lesson. They should instill in their children an awareness of their allowances as well as monthly expenses. This way, their kids can easily determine where their money goes each day and even each month.
A personal budget will also help your children to determine and cut on unnecessary spending that might compromise their capacity to pay for important expenses and bills. In so doing, parents can have the assurance that when their kids leave home, they can succeed in managing their cards and their overall finances in the most responsible way they can.
Instill in your young children these four pointers in managing their credit accounts and we guarantee that you will be able to help them become financially-stable and independent individuals.
Processing your request, Please wait....
