Your teen swears they are ready to face the world on their own. They are setting their own schedule and making their own plans. And they want a credit card to use on their adventures.
From a practical standpoint, giving a responsible teen a credit card can be a very smart parenting move. But an irresponsible teen can get themselves in too deep if given a card before they're ready. So how do you know your teen is ready for their first credit card? What do you say when they beg to prove that they're responsible enough for a card?
These six responsibility challenges can help you and your teen determine if they are ready for their very first credit card.
1) Handle an Entire Grocery Trip On-Budget
Take your teen to the grocery store and explain your process. Then challenge them to use your card to do the family shopping next week responsibly and on-budget. This is an important rite of passage for any young adult and a good lesson for your teen in the finer points of financial independence.
If they drive, make the challenge a full independent route. If your teen doesn't drive yet, take them to the store and read a book at the front while they handle the entire trip alone. If they get everything on the list, come in on-budget, and don't make any big blunders, then they pass the test.
2) Track & Record Personal Expenses for a Month
Teens generally have monthly expenses. School lunches, music, and trips to the mall with friends cost money. Challenge your teen to keep detailed records of everything they spend for a month including both allowance spending, school expenses, phone spending, and extracurriculars.
This will help your teen learn how much they spend, and how quickly they spend it. Check in on their spreadsheet or notes during the month and feel free to make suggestions for better record-keeping. But the real challenge is for your teen to make a note of every dollar they spend to add up at the end of the month.
3) Continually Carrying Wallet & ID for a Semester
In order to responsibly keep a credit card, your teen must be prepared to carry it. So before you get them a card with their name on it, challenge your teen to keep their wallet and ID on them at all times like a modern adult. Wallet ownership is an important part of any responsible adult life, and your teen will need to get used to wearing a wallet with their critical cards inside.
For many parents, the beginning of this challenge will start by finding your teen a wallet or giving them a hand-me-down wallet to start with. Use their school ID as a test case.
4) Handle Personal Christmas Shopping Budget
Christmas shopping for friends and family is something teens do more independently as they get older. Parents often don't think twice about sharing the credit card (and a strict budget) for gift shopping as the holidays approach.
This year, make gift shopping part of the personal responsibility challenge. This year, give your teen the credit card and budget, and challenge them to keep careful track of every dollar they spend and how they stayed under-budget with smart gift-buying decisions. If your teen can be trusted to gift-shop, they know how to use and budget a card.
5) Plan a Party On-Budget with Your Credit Card
Teens often beg to throw parties without an understanding of how much parties can cost. Chips, soda, and decorations can stack up. But planning a party with a budget can serve as a valuable learning experience and responsibility challenge. The next time your teen asks to throw a party, give them a budget. Let them be their own party planner and grasp the true cost of an awesome party. If they come in under-budget and can give you a report on the smart decisions they made to do that, then they're one step closer to being ready for full credit card responsibility.
6) Manage Summer Camp Cash Budget Responsibly
Finally, there is the summer camp experience to think about. Teen summer camps are different from those for small children, and there is often a snack shop, gift shop, or trip to town where teen campers can spend their summer allowance.
Many parents give their teens a wad of cash or a limited payment card for these summer camp excursions and kids are responsible for handling whatever happens on the trip. If your teen can be trusted with either a cash budget or a limited card and spends responsibly, they are approaching the maturity needed for real credit card responsibility.
Responsibility challenges are a great approach for parents of active teenagers. If your teen insists they are ready for the privileges that come with adulthood, let them prove it by setting up responsibility challenges that they can pass by being smart, savvy, and conservative with their spending.