Tricky one this. Would you allow your children to use a credit card?
We’re not talking about pre-schoolers and eight- and nine-year-olds clutching a credit card and running up huge debts buying Justin Bieber tickets from the internet and a stack of add-ons for a computer game. That would be utter madness and only the most irresponsible of parent would let their offspring have unfettered access to what would be (to them) almost unlimited supplies of money. Down with that sort of thing.
On the other hand, when should a teenager be allowed to use credit cards? It’s all a question of maturity, because there’s no denying that shopping and money management through a card and electronic means is going to play a huge part in their future lives, so they have to learn at some stage or another.
The laws in Singapore are pretty strict on letting young people apply for credit cards, and rightly so. You have to be at least 21 years old to be able to apply for your own card, and have a minimum declared income. Worried about bad debt as a result of youthful immaturity, the MAS (Monetary Authority of Singapore) makes sure that you have to be a responsible adult to own a card.
But as a parent, should you let a teenager use your card? There’s all kinds of ethical problems here in letting this happen. Firstly, family member or not, letting them use your card isn’t strictly legal and can raise all sorts of problems if a vendor suspects fraud.
However, in terms of supervised use, you can offer vital lessons to your teenagers in money management. Make sure you have the final say in any credit card transaction, and only allow purchases to be made in your presence, with you still holding the card.
And here’s the absolute top lesson: Only let them use the card if THEY can afford to pay off the debt to you in the same month. That way, it’s already ingrained in their minds that this is the way credit cards work by the time they reach the age of 21. In doing so, you’ve created a responsible credit card user with a sensible attitude to money management.
Article by Jason Taylor – [email protected]