- Narrator: Is it wise for a teen to have a credit card? You may think it's pretty risky, even if he or she already has a debit card and has used it responsibly. Of course, debit cards only work if there's money in the bank. Credit cards, on the other hand, offer the temptation of buy now, pay later. They even work with no money in the bank, because the money is advanced as a loan. But if that part about pay later doesn't happen on time, credit cards can plunge both teens and adults into serious debt. So what's the answer? About a third of all high school students use credit cards, and those under the age of 18 can get one if a parent or guardian co-signs on the account. Once they turn 18, they can sign up all on their own. That's when those tempting credit card offers start coming in. Before then, some parents help their teens under 18 ease into the world of credit cards by co-signing for an account. There are two practical reasons for this. Reason number one: Parents can help teach their kids how to use credit cards wisely, before they go off on their own or off to college. But parents should stress that navigating the potential risks of credit cards can be like walking through a minefield. Considering the late fees, high interest rates and other lurking dangers, one false step, and teens may see their finances go up in smoke. It's critical they understand that credit cards are not a form of supplemental income! Reason number two: Once teens have used a credit card wisely, and have consistently paid it off on time, they'll start building a good credit rating. That will help them get loans in the future for education, automobiles and even a home. Spending on credit can be a powerful financial tool for teens and adults, as long as that pay later part is never ignored. The trick is to realize that every credit card purchase is actually a loan that has to be paid off, with real money.