Tuesday, November 23, 2010
Teens and Credit Cards
This year, she transferred to another university, and, once again, I was required to cosign. While I’m happy to assist my daughter, I also feel it’s important for her to take on the responsibility of bills without the backup of mom being on the hook if she can’t pay.
Now, my son, who is 17, has decided he wants to make a large purchase, and, yep, he wants us to cosign. I’m conflicted. This is for several reasons. First, he wanted to buy a car. A car! He has one. The reasoning was that at low interest with $6000 for his trade-in (they were running a special) and a loan at 84 months, he could afford this car. 84 months! Clearly, the logic, while accurate in his ability to pay, was flawed. 84 months for a car he doesn’t need with mom on the hook just isn’t going to happen.
What happens when my name is no longer tied to their credit? Yes, we’ve taught the value of savings and not buying anything on interest. We’ve demonstrated that credit cards can be used to one’s advantage as long as they are paid off every month. However, we’ve all tasted the allure of instant gratification. My hope is they will use their “power” wisely and not have to learn the fiscal hard way.
How have you introduced your teens to the world of credit?