Saturday, June 4, 2016

Should teenager in Singapore have credit cards?

Hi Everyone!

I have come across a blog post by the famous dividend warrior, where he post about whether should teenagers in Singapore have credit cards : Should Teenager in Singapore have credit card?, the actual post can be found on Should Teenager in Singapore have credit cards? - SingSaver - I have no affiliation to SingSaver or whatsoever, just posting my own personal view

So after reading the post, it kept me thinking, whether should a teenager carries credit card for their daily usage. Personally, there are pros and cons when it comes to a teenager carries a credit card. I will start with the pros, follow by cons then lastly my personally view on whether if I will let my future kids carries credit card.

Pros of having credit card in early age:

  • Convenience - because due to the emerging market of e-commerce, buying things online will be cheaper than buying things in the mall. With a credit card, teenagers can purchase their stuff at a cheaper price.
  • Rebates - There are tons of rebates when using credit cards, like dinning, shopping online and etc.
  • Limitation - With credit card, parents can set limitation on how much they can use so that they won't overspend during that month.
Cons of having credit card in early age:
  • Overspend - Even if there is a limitation on how much to spend within a month, there might be a case whereby the teenager might hit the credit card limit within the first 2 weeks of the month. This will cause them to suffer for the rest of the month. Knowing this situation, parent might/might not increase the credit limit. If the parent increase the credit limit, it will just go loose. However, if not, the teenager might do something else to earn money for the rest of the weeks (be it legal or illegal means)
  • Affecting studies - the overspending issue will flow over to this point whereby, if teenager tries to earn money for their daily expenses by working or other stuff, they might not be able to concentrate on their studies and eventually affect their studies. 
My Personal View

For me, if I have a kid, I won't let them have credit card unless that start working (full time). Many might say I am too conservative and somethings require to buy online but without credit card, it will be hard for the teenagers to buy. 

Of course, I am not restricting that, my kids can use my credit card to buy things online. Of course, it seems like there are too many restrictions but if you think about it carefully, if they rely on credit card too much, this might affect their financial thinking in their adulthood. They might think that it's okay to use future money for the things that they want it now.   

Of course, you might say that it is to train them to control their finances, but controlling their finances can come in any form, like weekly allowance and etc. I believe many of the readers here did not have credit card in your teens, and you are living quite alright. But when you see the news whereby adult are over spending with their credit card, this makes you feel scared to even owned a credit card (even for me, but luckily I am not a huge spender and only hit the minimum limit to gain bank interest).

Personally, I don't encourage teenagers to have credit card when they are still young. I would rather try to make them focus on saving money with weekly allowance. Because with the weekly allowance concept, they can slowly save bit by bit and they can control their finances better (My view)

So what is your view on this subject?


  1. Hi James

    I am definitely with you on this.

    There is no way a teenager should be entitled their own credit cards or even supplementary when they do not have a feel of how to control their own personal finance.

    It's good to train them in a way by limiting or tracking their spending pattern but other than that it's just bad.

    1. Hi B,

      I think is way too early for teenagers to own credit card without having the power to control and the pain of earning money. Even adults are facing credit card debts, so I dont think is a good idea for teenager to have it