Why Organizations Need Financial Wellness

Skip to Main Content

The Truth About Teens and Credit Cards

Myth: Make sure your teenager gets a credit card so he or she will learn to be responsible with money.
Truth: Getting a credit card for your teenager is an excellent way to teach him or her to be financially irresponsible. That's why teens are now the number-one target of credit card companies.

Over 80% of graduating college seniors have credit card debt before they even have a job! The credit card marketers have done such a thorough job that a credit card is seen as a rite of passage into adulthood. American teens view themselves as adults if they have a credit card, a cell phone and a driver's license. Sadly, none of these "accomplishments" are in any way associated with real adulthood.

Related: What would you do with an extra $700 or more? That’s how much people save on average simply by having an insurance Endorsed Local Provider check their rates. See how much you could save.

money icon

Take control of your money with a FREE Ramsey+ trial.

You are not teaching your 16-year-old child to spend responsibly when you give him or her a credit card any more than you are teaching gun responsibility by letting him sleep with a loaded automatic weapon with the safety off. In both cases, you as a parent are being stupid. People with common sense don't give 16-year-olds beer to teach them how to hold their liquor. By giving a teenager a credit card, the parent—the one with supposed credibility—introduces a financially harmful substance and endorses its use, which is dumb but unfortunately very normal in today's families. Parents must instead teach the teenager to just say NO.

Pouncing on the College Prey

Anyone visiting a college campus in recent years has been shocked at the aggressive and senseless marketing of credit cards to people who don't have jobs. The results can be devastating. Recently, two college students in Oklahoma gave up on their credit card debt and committed suicide with the bills lying on the bed beside them.

Vince called my radio show with a problem that has become a trend. Vince signed up for multiple cards during his sophomore year at college to get the free campus t-shirt. He wasn't going to use the cards unless there was an emergency, but there was an "emergency" every week, and soon he was $15,000 in debt. He couldn't make the payments, so he quit school to get a job. The problem was, without his degree, his earnings were minimal. Worse than that, he also had $27,000 in student loans. Student loans aren't payable while you are in school, but when you leave school by graduating or quitting, the payments begin.

Vince was one scared 21-year-old with $42,000 in debt but making only $15,000 per year. What's scary is that Vince is "normal." The American Bankruptcy Institute reveals that 19% of the people who filed for bankruptcy last year were college students. That means one in five bankruptcy filings were by very young people who started their lives as financial failures. Do you still think it is wise to give a teen a card? I hope not.

Help guide your teenager toward making smart money decisions. Dave's bestselling book, The Total Money Makeover, is an entertaining and helpful resource to get them started.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

Related Articles

Who Really Pays for Credit Card Rewards?

The Truth About Credit Card Rewards

6 Minute Read | Debt

Credit card rewards may seem like a no-brainer, but we’ve got three big questions: How do they stack up next to interest payments? Is there a better way to manage your money—cash back or not? And who’s really paying for those perks?

Ramsey Solutions  Ramsey Solutions

How credit cards work

How Credit Cards Work

15 Minute Read | Debt

Learn everything about credit cards—including the ins and outs of interest, all the fees involved, and how credit cards work anyway—so you’ll know what kind of card is best for you.

Ramsey Solutions  Ramsey Solutions

Words on a whiteboard:

How Does Credit Card Interest Work?

12 Minute Read | Debt

Credit card interest got your head spinning? Find out how much credit card interest is really costing you and what you can do to avoid it.

Ramsey Solutions  Ramsey Solutions

Get a FREE Customized Plan for Your Money!

Get a FREE Customized Plan for Your Money! 

Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
Take the Assessment

Get a FREE Customized Plan for Your Money! 

Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
Take the Free Assessment