Kids and Credit Cards - An Update
In the last issue of Matt About Money I said that co-signing for a credit card for your teenagers is a good way to give them real-world experience managing credit before heading off to college. A reader rightly pointed out that there are other, possibly better options as well. They include a debit card tied to the child's own checking account and a "secured" card, which works like a gift card. An amount is deposited and then the card can be used to spend up to that amount. Children as young as 13 can get a secured card, such as Visa Buxx. While there are fees involved, with proper parental supervision the cards can help teach young people to use plastic responsibly.
Matt's View
On a related topic, it's also important to teach our kids the importance of protecting their Social Security number. According to an ABC News report, identity thieves see children as an ideal target because they often don't find out they've been victimized until they're old enough to apply for credit. Unfortunately, it's tough to monitor any potential misuse of a child's Social Security number. The credit bureaus do not "knowingly maintain credit files on minor children." If you have a suspicion that your child's identity may have been stolen, you have to write to each of the three bureaus (choose the last option under "General FAQs"). The non-profit Identity Theft Resource Center offers additional ideas for keeping our kids safe from ID thieves.
This article filed in: Credit/Debit Cards , ID Theft , Kids
Managing Money by The Book
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