Credit cards can be a great way to teach teenagers about the importance of money. Although the very idea of putting a significant sum of money into an emotional young person’s hands may spark anxiety for some, teenagers can learn a lot about financial stability with a credit card.
In the UAE, anyone over the age of 15 (min. age varies depending on each bank) may use a supplementary or add-on credit card that is linked to a primary account, such as that of a parent or guardian. Such supplementary cards typically share the primary holder’s credit limit. In other words, the primary holder is responsible for any debts on the add-on card.
Money lessons in a controlled environment
For the teenager, credit cards offer the opportunity to learn about finance under the supervision of a responsible adult, in what is effectively a controlled environment. It can be helpful for parents to set a few ground rules in advance, such as where the card may be used, what expenses can be charged and the limits on each.
With the UAE’s high-octane lifestyle on constant display, it often seems like temptation lurks around every corner and on every social media network. With easy access to designer labels, expensive restaurants, and other attractions in the UAE, it can be easy to overspend.
As with other aspects of parenting, an open discussion around the use of the card on a regular basis – perhaps each time a statement becomes available – can help build confidence, prevent misuse, and make it easier for the teen to ask for help or advice.
Like everything else in life, there are pros and cons to credit cards and understanding both aspects is vital to responsible financial management.
Advantages of credit cards for teenagers
Using a credit card in this sort of controlled environment carries several advantages for teenagers in the UAE.