Get your teen a credit card

April 8, 8:21 AMNY Consumer Affairs ExaminerAsa Aarons

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Getting a credit card is a major rite of passage. But many parents wonder whether their teens are ready for the very adult rights and responsibilities that come with the card.

There are significant pros and cons to consider, from safety and convenience to the potential to create long-term credit problems. Just don't think too long. Odds are by the time your child turns 18, he'll probably be able to get credit on his own--without your consent.

Knowing that, you may want to take preemptive steps to prevent inevitable credit mistakes.

• Keep control by opening a joint credit account with your teen. That way, you'll have full access to the account.
• Set up online account access, which enables you to monitor the account regularly and prevent end of the month statement surprises.
• Insist on a low credit line. Do not allow the card issuer to establish the account with an initial credit line of more than $300 to $500.
• Ask your teen for a deposit at least equal to the card's maximum credit line. Put the money in an interest bearing savings account. Explain to your teen that you won't touch the money unless he fails to make his regular monthly payment.
• Tell your teen that  most credit cards have high interest rates--and explain that you expect him to avoid finance charges by paying his account in full each month. Ask him to give you cash to pay the bill at least 10 days before the payment is due.
• If he fails to give you the full payment by the date you agreed, take double the amount due from his savings account. Pay the bill, keep the rest as a penalty and confiscate your teen's credit card until he rebuilds the deposit account to the original balance.