It's hard for parents to watch their kids grow and take on more adult responsibility. Sometimes even when the kids are ready for the next step in growing up parents are still reluctant. One of the big milestones in a young person's life is receiving their first credit card. This is one of those very serious steps that should be carefully considered.
It seems that young people always want exactly what their parents don't want them to have. It seems that they make an effort to go in the opposite direction their parents want them to go. Credit card use is not an exception.
Teens and early twenties are the years when young ones are breaking away from being a kid and entering the adult world of financial aid and student loans. It is also the time when they become a real consumer and that makes them a target.
Credit card companies are quick to extend credit to students and they work along with the colleges to lure the students into applying for credit; even giving them a credit card with their school logo on it. That is great for the credit card companies and even great advertisement for the school. But for the uneducated cardholder it can equal trouble.
Students don't need their parent's permission to get a credit card. They are readily available and a student can apply and qualify on his own. The parents have little control over the situation unless they take control and take the initiative to introduce their child to credit.
By adding them to an account that you already have you maintain more control and can monitor their spending habits. This way you can see if they are handling the finances wisely and making smart purchases.
Even though the account is in your name be sure you hold them accountable for payment for their purchases. This will teach them responsibility and money management. It is better to review the monthly statement with them also rather than simply telling them how much they owe. They should be involved in the repayment process as much as possible.
A smaller beginning step to take is to open a checking account with a debit card. Your child can use that debit card just like a credit card and the limit will be whatever amount you establish to deposit into the account each month. How well they are able to budget their spending with this account will be a good indication of how well they will handle a credit card in the future.