- 1 5 reasons why the Amex Everyday card is the best credit card for teenagers
- 2 10 Things To Be Certain Teens Know About Credit Cards
- 3 Getting a Credit Card for Your Teen – Is it the Right Thing to Do?
5 reasons why the Amex Everyday card is the best credit card for teenagers
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Three years ago, I decided to give my oldest daughter a credit card. She was in 10th grade then. I debated between a Visa card and an American Express card. Ultimately, I added her as authorized user under my American Express Everyday® Preferred Card. Looking back, I strongly believed that I made the right call. I think the Amex Everyday® card is the best credit card for teenagers.
I doubt 10th graders can get their own credit card. But even if they could, why would you let them do that? Adding them as authorized users under your name would be a safer bet and provides many benefits. I set very specific rules for my daughter for using the credit card – what can be charged and how much, and I monitor her usages closely! There are five reasons why I think the American Express Everyday card is the best credit card for teenagers.
Unlike Visa or Mastercard, American Express assigns a different number for each cardholder. This was the ultimate reason why I went with American Express for my daughter’s card. Different card numbers makes tracking super easy! Also unlike Visa or Mastercard, Amex lists charges clearly for each cardholder, and provides the total amount spent by each cardholder on the monthly statement. I even set up a separate Amex login for my daughter. Not only she has her own Amex Offers, most importantly she gets the opportunity to learn about how to monitor and manage her expenses.
Worry about the teenager charge too much on the credit card? American Express allows you to set a custom limit and receive an Alert whenever the balance reaches the spending threshold that you determine. This custom limit can be modified or removed at any time. You can also freeze activity on the card at any time!
One of the unique features of the Everyday card is a monthly bonus not based on the amount spent, but on transaction volume. The Everyday card offers a 20% bonus on points earned after 20 transactions are made during the billing period, and the Preferred card has a 50% bonus after 30 transactions.
Teenagers makes lots of small purchases! A coffee here, and Jamba Juice there. Before you know it, you reach the monthly transaction threshold in no time. While my daughter makes small purchases, I put my big purchases on the card! And every purchase earns bonus points! Those bonus points do add up nicely over time! They certainly played a role in how I earned 1.6 million points in 2016.
Monitor the transaction tracker to ensure you reach the threshold within your statement month!
#4: Their purchases will earn category bonus just like yours!
The card comes with category bonus for purchases at supermarkets (up to $6,000 per year) and gas station.
- Everyday card – 2x supermarket and 1x gas station
- Everyday Preferred card – 3x supermarket and 2x gas station
When my daughter goes shopping at Sephora, Macy’s, Forever 21, or any stores, I told her to stop by our local Safeway to pick up a gift card first. Sometimes she does my grocery shopping too. Each year I max out the $6,000 annual limit at grocery stores and she certainly contributed. She also puts gas in her car every two weeks or so. All her charges on the card earns extra points regardless how small the amounts might be!
I had to provide my daughter’s social security number when I added her as authorized user under my name. While I am responsible for payment on the card, the card’s pristine payment history also shows up on her credit report. This will help her build her own credit without any downside risk.
Whether you choose the regular Amex Everyday® Card from American Express or the Amex Everyday® Preferred Card from American Express, either one is the best card for a teenager.
This content is not provided or commissioned by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.
10 Things To Be Certain Teens Know About Credit Cards
In the financial field, there is a lot of debate on the topic of teenagers and credit cards.
On one hand, some people advise that teens get credit cards so they can learn how to use them responsibly. On the other hand, some think that this is like handing a teenager a loaded gun.
I’m of the opinion that teens should learn important credit card facts. However, teens should learn important money lessons before they start using credit. That doesn’t mean you need to get a credit card for your teen, but they should be educated about credit cards so they are prepared to use them if they ever get one.
Important Note: With the new Credit CARD Act, a person must be 21 years old to get a credit card unless someone co-signs for the credit card, or they can show proof of income and ability to repay loans.
- A credit card is a contract. When you sign up for a credit card, you agree to certain terms and conditions. When you buy something, you have already agreed that you will pay them for every dollar you spend.
- Unpaid bills put you further and further behind. They lower your FICO score which may be important to your financial future. In your teenage years, you should be getting ahead financially, not falling behind.
- A credit card offer in the mail does not make you special or important. Owning a credit card does not make you cool. I remember the teen years – everything is about status. Somehow our teens are being taught that a credit card is a status of adulthood.
- The minimum payment is not what you should pay – pay the balance in full. It really sounds like the credit card company is cutting you a deal. “You owe me $150, but I’ll just take $25 for now.” Never pay the minimums. Pay your balance in full every month.
- Grace period is not an act of kindness. This is another deceptive term. Once again, they make it sound like the credit card company wants to buddy up. I’ve found that if I don’t pay the bill right away, I’m more likely to forget to pay the bill. As a result, I pay the balance when I get the bill.
- Get the right credit card for you. The best way to get a credit card is to match your needs with credit card features. This typically does not come in the form of a direct mailing. If you want a credit card, shop around and find the card that has the best features for your needs, not the logo of your favorite sports team (for example a 0% APR credit card, a 0% balance transfer, or rewards credit card).
- A higher credit limit is not the goal. In many ways, a high credit limit can be dangerous. Instead, decide how much you might need and ask the credit card company to lower your limit to that amount. Typically, a teen’s limit does not need to be above $500.
- Interest rates and fees. Credit card companies make their money by charging interest and fees. The more interest you pay, the less money you have to save towards your future. Believe me, your future self won’t be too happy if all he or she can do is pay interest.
- Never lend your credit card or credit card number. Also, credit card companies will never ask for your account information. If someone calls and asks for your credit card information, hang up the phone and dial the 1800 number on the back of the credit card. If they need something, they will help you through that number.
- People spend more money with credit cards than cash. I’ve tracked my own spending, and I agree that people do spend more with credit than cash. So why do people keep using credit cards? Basically, because credit cards have advantages over cash.
With the new CARD Act, a person must be 21 years old to get a credit card unless someone co-signs for their credit card o they can show proof of income. Don’t get them their own credit card and co-sign. If you do, they have the card, but you are financially liable. If you want them to have a card, add them to your account so you can monitor all their transactions. Take away their right to use the card the first time they violate a spending limit.
Alternatives if you are not comfortable with giving your teen a credit card:
- Debit card – Open an account in their name and get a debit card for that account. This way they cannot spend more money than is in the account.
- Prepaid credit card – you will have higher fees with a prepaid credit card, but at least you can control the spending.
- Teach them to use cash – there is nothing wrong with the old cash system.
Anything else you think teens should know before using a credit card? Should teens be permitted to use credit cards?
Getting a Credit Card for Your Teen – Is it the Right Thing to Do?
How do you prepare your child for a good financial future? For many parents, making sure that their child has a bright future means making sure that they get a college education. Others go so far as building a trust fund for their kids. Does getting a credit card prepare your child for a good financial future? If they come up to you and say “can I get a credit card?”, do you say yes? do you say no?
How can you tell if getting a credit card for your teen is the right thing to do?
Here in Indonesia, you can get a supplementary card for your child as long as they’re 17 years old. If they want to apply for a credit card on their own, they need to be at least 21 years old.
Your child can get the same benefits that you get with a credit card. They benefit from the convenience of not needing to bring a lot of cash when they go out. It’s also a great way to pay for school essentials such as textbooks or new laptops or tablets. If they have a credit card, you don’t have to worry if they have money to spend if they can’t get home immediately after a school trip.
A credit card can also be misused. You might be shocked to find a huge charge on your credit card bill and be unable to cancel the purchase. A misused credit card can wreck havoc on the household budget if the bill gets too big and the charges are not reversed.
So should you apply for a supplementary credit card for your teen? If they asked you to get one for them, ask them what they need it for and see whether a credit card is the right financial tool for them. You may realize that a debit card may be more useful for their needs.
If you think that a credit card is the right tool for them, then you should talk to your child and lay down the rules about using the card. Let them know when and for what they are allowed to use the credit card.
The great thing about having a supplementary credit card is that you can still monitor the activity on the card and see what are being charged on the card. Normally, the supplementary credit card’s credit limit is the same as the primary card. To be on the safe side, you can also request that the card limit on the supplementary card be lowered so that you can put a cap on your child’s spending.
Letting them have a credit card can be great way to teach them about their financial responsibilities and reviewing the monthly credit card bill with them can be a way to talk to them about good financial habits.
As long as you are confident that your child is responsible enough to use a credit card wisely, then feel free to apply for a supplementary credit card for them. Being responsible with credit, how to save money, and how to earn money are the financial skills that they need to learn from you as their parent.