Credit cards can introduce teens to money management if parents are involved in the process.

By MEGHANN COTTER

Date published: 5/8/2005

Who needs an allowance?

Some teenagers, even as young as 13 or 14, are now carrying credit cards in their names.

Experts say teaching young people to pay with plastic can give them real-world spending knowledge. But letting a teen own a card without supervision could be a recipe for a long-term debt disaster.

Eleven percent of all teens now have credit cards, according to a Teens and Personal Finance poll conducted by Junior Achievement Worldwide. The organization educates young people about business, economics and entre-preneurship. The study showed that even 6 percent of teens ages 13 to 14 have credit cards.

Walter Bouchard, financial planner and owner of Bouchard & Associates--a branch of American Express Financial Advisors in downtown Fredericksburg--says credit cards can establish very good patterns of behavior, or some bad ones.

"The use of credit cards is not the problem," he said. "It's the use of credit cards accruing balances that can be a problem."

Teens under 18 usually need a parent to co-sign or include them as a joint owner of a credit card.

Many parents sign for their teen so that they will have it in case of emergency, learn about money management or establish credit early on, experts say.

But allowing teens to have that responsibility carries additional duties for the parents.

"You can't just say: 'Here it is. Learn how to use it,'" said Bruce McClary, corporate trainer and certified counselor for Credit Counselors. "That can potentially set the stage for disaster."

His Richmond-based nonprofit agency helps people with money management and debt repayment planning. The organization has a local office on Princess Anne Street in Fredericksburg.

A lot of late-teens to early-20-year-olds end up coming to see McClary or Bouchard because no one taught them about the pitfalls of credit cards.

"[Credit companies] make it available, make it convenient, but kids haven't developed the judgment, the understanding of what's really necessary," Bouchard said. "When you are in college, spring break is really necessary. When you are 30 to 40 years old, spring break is optional."

Date published: 5/8/2005