top of page

Teach Your Teen About Credit Cards

Today’s teens are used to seeing cards used for just about every type of financial transaction. They’ve most likely received gift cards as birthday gifts, and many are already using debit cards sourced by a checking account by the time they are in high school. This familiarity with card payment services at a young age may make it more tempting to use credit cards without fully understanding how they work. These tips can help you introduce your teen to credit card basics.


At its most basic, a credit card is a plastic device that allows the user a convenient way to borrow money on-the-spot. If the amount borrowed is paid back in full within a specific period of time – usually around one month – the borrower will not have to pay interest charges. If the amount is not paid in full within the specified cycle, the user can instead pay smaller amounts on a monthly basis along with additional interest charges. Additional fees may be charged to the borrower, as defined in the credit agreement. The longer the borrower takes to pay off the credit card balance, the more interest charges they will have to pay.


  • A credit card is not “your money” or “extra money”.

  • It’s not the same as a debit card.

  • It’s not a status symbol or a sign of wealth.


  • It can be convenient to borrow money quickly, if needed.

  • Some credit cards have “rewards” like airline miles or cash back offers.

  • You can make hotel or car rental reservations without needing a large deposit, as with a debit card.

  • You can make purchases online without risking your personal cash if fraud occurs.


  • People using credit cards are more likely to overspend than if they are buying with their own money.

  • It’s easy to charge more than you can afford to pay off quickly, which means paying interest.

  • Many credit cards charge other fees in addition to interest.

  • There is an increased risk of financial fraud when using a credit card.

Credit cards are financial products that can be easily mismanaged, so it’s important that young people understand the pitfalls and approach them with caution. This is so important that age restrictions were put in place to protect teens and young adults from getting credit cards too soon without parental supervision. Make sure your teen understands these credit card basics before they start using one.


Help us empower the next generation for financial success!

The Center for Financial Empowerment is a 501c3 nonprofit organization whose mission is to empower disadvantaged youth through financial literacy education. Find out more about our work.


Taking Charge Of Credit Cards, Take Charge Today, November 2014


Die Kommentarfunktion wurde abgeschaltet.
bottom of page