Many teens carrying credit and debit cards

updated 12:51 p.m. ET April 14, 2005

NEW YORK - The credit card generation is getting younger.

A recent poll of teenagers who participate in the Junior Achievement program found that more than 11 percent are carrying credit cards, and some of them are as young as 13 or 14 years old. In addition, three out of 10 teenagers have checking accounts, and many are likely linked to automated teller machines with debit cards.

“We were a little surprised at the numbers,” said Darrell Luzzo, senior vice president for education at JA Worldwide, which is headquartered in Colorado Springs, Colo. “Having a credit card is not necessarily a terrible thing, so long as they're being educated about the appropriate financial principles.”

But while 82 percent of the teen credit card users said they paid their bills in full every month, 18 percent said they carried balances over — a practice that has gotten a lot of their parents in trouble.

“That isn't great,” Luzzo said. “After a little more education, we'd hope that 82 percent would rise.”

Financial experts are concerned about the growing use of credit cards by teens, although they generally must be co-signed by parents until a child is 18 or older.

“I personally think that 13 to 14 (years old) is too young,” said Laura Levine, executive director of the JumpStart Coalition for Personal Financial Literacy, a nonprofit educational group based in Washington, D.C. “It really depends on the individual kids. ... Kids mature at different rates, so I don't think there's a single, magic age.”

The key, Levine said, is the involvement of parents in teaching children how to use both credit and debit cards — and in monitoring their children's use of plastic.

“You don't give a child a musical instrument and say, ‘Plunk around on this for a while a see if you can learn to play,’” she said. “The act of giving kids a credit card or a debit card isn't going to give them good money management habits. There has to be teaching and practicing.”

Levine suggests parents who do get cards for their children sit down and go over their monthly statements, talking about things like interest rates, the importance of paying on time and spending habits.

That lets them learn from their mistakes while they're still at home, not “when they're 18 and off to college or work and they're eligible for their own cards anyway.”

That's what prompted Lorene Kimble of Corning, N.Y., to help get her 16-year-old daughter Heather a debit card last summer, along with both a checking and a savings account. Kimble said her goal was to teach Heather how to better manage her money, including income from an after-school job at McDonald's.

MORE FROM PERSONAL FINANCE

Personal finance Section Front

Answer Desk: Jobless benefits explained 4 financial life-changing events How to ignore grocery stores’ covert marketing Best of both worlds? Combined pension/401k Amid panic, uncertainty, they retired anyway Easing job losses point to wobbly recovery You can handle debt issues better than agencies Long-term jobless face frayed safety net Answer Desk: GDP growth overstates case Calculating the best and worst rental markets Personal finance Section Front   Add Personal finance headlines to your news reader: