Is your teen ready for their first credit card?

Is your teen ready for their first credit card?

Last updated: 26 April 2019

Teaching your kids how to manage their own finances is a challenge most parents will face and introducing your teenager into the world of credit can be quite daunting – especially when you’re not 100% sure on how it all works yourself. If your teen is thinking of getting their first credit card, here are a few things you might like to consider first:


Do they really need a credit card?

Credit is no joke. When your teen opens a new credit card account, they must be sure that they can repay the amount that they spend on the card, plus any interest charges and fees that they incur. If your teen doesn’t have a reliable income or isn’t the most responsible at the best of times, you might want to rethink if a credit card is the right choice for them. As we always say, only apply for credit if and when you really need it.


Could they use a debit card instead?

If your teen is only looking for a card that allows them to pay for their everyday expenses, such as food, transport, mobile etc., a debit card could fulfil that role while only letting them spend the money that they have in their bank account.


Will they get approved?

Most credit card providers have minimum eligibility requirements that you need to meet to qualify for the credit card. For example, to apply for a credit card, you may need to:

  • Be 18 years of age or over
  • Have a good credit rating
  • Be a permanent Australian resident, earning a minimum annual income of $15,000.

In order to apply for a credit card, you often need to provide documentation to verify your identity (such as a driver’s licence) and income (such as payslips). If your teen doesn’t meet the minimum requirements or doesn’t have the proper forms of ID, they may find it hard to get approved for a card.


Could they use a supplementary credit card?

You could consider giving your teen a supplementary card on your credit card account that they are responsible for. This could be an option if your teen doesn’t qualify for a standard credit card or if the card is only to be used for emergencies. However, as the primary account holder, you are ultimately responsible for repaying the amount that they spend, so be sure that your teen won’t abuse the card and go on a spending spree with all their friends, leaving you with the bill.


What type of credit card should they apply for?

Unfortunately, there is no one-size fits all credit card for teenagers. The credit card that is right for your teen will depend on their individual circumstances. Check out our article where we breakdown the different types of credit cards: What credit card should I get?


What is their credit score?

If your kid is 18 years old or older, they should check and monitor their credit score. It’s particularly important that they know their credit score before applying for any credit and to protect themselves against identity theft. You can check and monitor your credit score for free at Credit Savvy!


Get your credit score for free


To learn more about credit cards, head over to our Learning Hub or check out our article: What you need to know about credit cards.