Parents need to start teaching their kids about money at an early age. And they need to teach by example. Experts don't agree about when and how to introduce kids to credit cards. Teens younger than 18 can only get a credit card if their parents co-sign for it. Abernethy recommends that children receive a credit card with a low credit limit and a checking account when they are 16.
Some teens are better able to handle financial responsibility than others.
Diahann Lassus, a financial planner in New Providence, N.J., says she doesn't like credit cards even for adults because they foster bad habits. A card with training wheels Many parents believe prepaid debit cards are a good stepping stone to credit cards. Teens can get the hang of paying for things with a plastic card. Several companies recently have introduced debit cards for teens that allow parents to transfer money onto the card and to monitor expenditures. When the value is depleted, parents can reload.