Should teens have a credit card?

Should teens have a credit card?

Long gone are the days when kids would stash their savings away in a beloved piggy bank in their bedroom. Nowadays, even the cash that used to rattle reassuringly inside them has largely disappeared in an economy dominated by the use of debit and credit cards.


According to the Bank of England in 2019, (even before the impact of Covid-19), only 23% of all transactions were paid in cash, compared to 60% a decade earlier. Digital technology has changed the financial landscape forever, not only for parents but for their kids too.


So does this mean that teens should now have their own credit cards to manage their finances? You might be asking, how old do you have to be to get a credit card? It is in fact still illegal for anyone under the age of 18 to have their own credit card account, although they can be an authorised user on an adult’s account.


The pros of a teenager having their own credit card

According to GoHenry’s 2022 Youth Economy Report, over 70% of UK and US teens believe that earning their own money is important. Earners are of course motivated to become consumers. Credit cards can facilitate teen purchasing power, but can more importantly, introduce these youngsters to the practice of healthy money management.


There are also added advantages to a teen with a credit card in an emergency, when neither cash nor parents are available.


Related: Ways to help your teenager build credit

The cons of a teenager having their own credit card

However, for any parent supporting a teenager with their own credit card, the road can be as daunting as when teaching them to drive. While of course, every individual is different, the enthusiasm of youth combined with the huge responsibility of managing a credit card can be a heady combination.


The lure of the latest trainers, a smartphone upgrade, or an online subscription can often seem far more important than maxing out their parent’s credit limit or paying their contribution to their parent’s monthly bill. Parents may then be faced with the prospect of a hefty and very unwelcome monthly bill. Credit cards for teens, without clear education and a back-stop, can be a minefield that affects the whole family.


Related: Credit tips for teens


The alternatives to a teen having their own credit card

There are clear advantages and disadvantages to teenagers having their own credit cards, but there are fortunately real alternatives to consider. Every parent wants their offspring to enjoy a secure financial future and so educating them in financial responsibility is a worthy endeavour.


Prepaid teen debit cards with parental controls, is one way of beginning this journey. Limiting your teenagers' spending in this way, whilst at the same time giving them some responsibility, is a good starting point. 


Related: Difference between a credit and debit card

GoHenry offers real solutions

GoHenry offers not only peace of mind for a parent but also the chance for your teen to be more money confident. 92% of parents say their teens are more money confident, thanks to GoHenry.


The prepaid debit card is available for kids from 6-18 years old, evolving with them as their income grows and their spending power increases.


Apps are here to stay and the functionality, accessibility and educational value of GoHenry, makes it the perfect financial accessory for any teen.

Wages from employers and/or pocket money from parents and gifts from friends and family can all be paid into the account. Engaging, bite-sized educational tips on spending and saving promote healthy financial management skills, and to top it all there is no risk of debt or overdraft, with its pre-paid function. 


Fingerprint and facial recognition, cyber security, and parental control to block spending in specified areas all point to a prepaid debit card where parents and kids can step more confidently into the world of finance.

How can I prepare my teen to manage their money better?

GoHenry’s Money Missions makes finance fun. Using video quizzes and a point system, kids can learn about basic budgeting, savings and borrowing, how to make a charitable donation, and even the first steps into financial investments.


It is no surprise to discover that Money Missions has been developed with financial education experts to national financial education guidelines.



Related articles:

Can a 16 year old get a credit card?

Teenager using parents credit card without permission

Can I add my child to my credit card?
Written by GoHenry Published Mar 14, 2022 ● 5 min read