The thought of giving your teenage son or daughter can cause nightmares for many parents. It is well known that credit card debt is a major problem in this country and it is getting worse every day. If adults cannot manage their credit card debt then how can we expect a teenager to do it? As a result of mismanaged credit card debt credit card companies made over 90 billion dollars in late fees and penalties. If you Fail to teach your children the pitfalls of credit card debt it can lead to serious financial problems in their future.

According to Bankruptcy credit card info the major cause of divorce and bankruptcy stems from too much credit card debt. Possibly the best way to teach your children about credit card debt would be the use of prepaid credit cards for teens. One thing you do not want to do is just give them the card with money already on it and let them head to the mall.

Probably the first thing you need to do is set up a budget with them. Let them understand that the money in their new prepaid card will be used for clothes, transportation, entertainment and school supplies. Money will be placed on the prepaid credit card for teens each month and when the money is gone you will not be giving them any more funds. In addition as part of the budgeting process you need to make sure that as part of any income from a job will be dedicated for savings. This normally about 10 percent will be placed in their savings account. Make them understand that these savings will be used for college or some other worthwhile endeavor.

Many parents have a matching program where they will match all money that is put into the savings account. When the account reaches approximately $2500 then you need to teach them about investing by moving the money into a mutual fund. Every step must be done with the son or daughters full involvement or the lesson will not be learned.

The once a month budget meeting with your son or daughter is a great time to teach them about money and debt. These lessons learned at this time are essential for them to live a debt free life. Almost all teenagers that graduate from high school do not have the ability to balance a check book. There are very few schools that teach kids how to handle money. It is basically left up to the parents to teach their kids how to use money. Unfortunately very few parents take the time to teach this very important subject. It is just easier to give them a prepaid credit card for teens and let them learn for themselves.

A prepaid credit card for teens is a good financial teaching tool. Learning how to handle money as a teenager may just keep them from becoming a slave to credit card companies Proverbs says that "the borrower is the slave to the lender". Giving you child the gift of financial wisdom and independence is the right thing to do. No one wants their child to end up as a slave.