Controlling Your Kids' Credit Card Spending

If you want your older teenagers to have a credit card for emergencies, but you don't want them to go crazy with it, you have a number of options. Linda Sherry from the non-profit group Consumer Action says the key is to maintain some control, and at the same time, help them establish credit. One option is to add your child as an authorized user on an account you control. It's a separate card number, but the charges show up on your bill.

Another way is to be a co-signer on a credit card. Your child gets the bill, and you can monitor activity on-line by setting up a joint password. Some parents have their kids apply for credit cards with a $300 credit limit for starters to see how they handle it. You might also check out pre-paid credit cards, a good option for young teens, where you pay in advance and they charge against a set amount of money.