Financial responsibility is a crucial skill that teenagers should cultivate early on to ensure a stable and secure future. Introducing teens to the concept of credit cards can be a valuable step in this journey.
However, selecting the right credit card is essential to foster responsible financial habits. In this article, we will explore the importance of teaching financial responsibility to teens and highlight the top 10 credit cards in the Philippines designed specifically for this purpose.
PROS AND CONS OF GIVING YOUR TEEN A CREDIT CARD
PROS
Financial Education:
- Providing a credit card offers an opportunity to educate teens about responsible spending, budgeting, and building a positive credit history.
Emergency Preparedness:
- A credit card can serve as a financial safety net in emergencies, teaching teens how to handle unforeseen circumstances responsibly.
Building Credit History:
- Early exposure to credit cards allows teens to start building their credit history, which is beneficial for future financial endeavors like obtaining loans or mortgages.
Convenience and Security:
- Credit cards offer a convenient and secure way for teens to make purchases, especially in situations where carrying cash may not be practical.
Parental Controls:
- Many credit cards for teens come with parental controls, allowing parents to monitor and guide their spending, providing an added layer of oversight.
Authorized User Options:
- Allowing teens to become authorized users on a parent’s credit card helps them learn about financial responsibility within a controlled environment.
Establishing Independence:
- Using a credit card gives teens a sense of financial independence and helps them make informed decisions in a controlled setting before they face greater financial challenges in adulthood.
Rewards and Incentives:
- Certain credit cards offer rewards and incentives for responsible spending, encouraging positive financial behavior.
CONS
Risk of Overspending:
- Teens may lack the financial maturity to manage credit responsibly, leading to the risk of overspending and accumulating debt.
Interest Charges:
- If teens do not understand the concept of interest rates and fail to pay their balance in full, they may incur interest charges, contributing to financial stress.
Potential for Misuse:
- There is a risk that teens may misuse the credit card for non-essential or impulsive purchases, which can lead to financial challenges for both the teen and the parents.
Security Concerns:
- Credit cards can be lost or stolen, posing security risks. Teens must be educated on the importance of keeping their cards secure and reporting any issues promptly.
Negative Impact on Credit Score:
- Irresponsible credit card usage can negatively impact a teen’s credit score, affecting their financial prospects in the long run.
Dependency on Parents:
- Some teens may develop a dependency on their parents to bail them out of financial trouble, hindering the development of financial independence.
Pressure from Peers:
- Peer pressure can influence teens to spend impulsively, especially if their friends also have credit cards, leading to financial mismanagement.
Educational Requirements:
- Not all teens may be ready for the responsibility of a credit card. It requires a certain level of financial literacy and discipline that not every teenager possesses.
Now that you understand the importance of introducing teens to credit cards and the potential pros and cons, here are ten credit cards specifically designed for teenagers.
1.UnionBank Rewards Credit Card
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 2 | At least 14 years old | ₱15,000 | Primary: ₱2,500; no annual fee when you apply until January 31, 2024 and meet the minimum spend Supplementary: ₱1,250 | 3% | ₱1,000 | ₱500 |
2. Metrobank Titanium Mastercard
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 4 | At least 14 years old | ₱15,000 | Primary: ₱2,500; no annual fee when you apply until February 29, 2024 and meet an annual spend of ₱180,000 Supplementary: ₱1,500 | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱750 |
3.Metrobank Platinum Mastercard
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 4 | At least 14 years old | ₱58,333 | Primary: ₱5,000; no annual fee when you apply until January 31, 2024 and meet an annual spend of ₱400,000 Supplementary: No annual fee for the first approved cardholder | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱750 |
4. HSBC Red Mastercard
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 4 | At least 15 years old | ₱16,667 | Primary: ₱2,500 Supplementary: ₱1,250 | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱800 |
5.HSBC Gold Visa Cash Back
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 4 | At least 15 years old | ₱16,667 | Primary: ₱2,500 Supplementary: ₱1,250 | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱800 |
6.HSBC Platinum Visa Rebate
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 4 | At least 15 years old | ₱41,667 | Primary: ₱5,000 Supplementary: ₱2,500 | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱800 |
7.Security Bank Gold Mastercard
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 5 | At least 16 years old | ₱30,000 | Primary: ₱2,500 (free for the first year) Supplementary: No annual fee for the first approved cardholder | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱500 |
8.Security Bank Complete Cashback Mastercard
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 4 | At least 15 years old | ₱65,000 | Primary: ₱3,000 (free for the first year) Supplementary: ₱1,500 | 3% | ₱1,000 or unpaid minimum amount due, whichever is lower | ₱500 |
9. BPI Amore Cashback Card
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| 6 | At least 13 years old | ₱15,000 | Primary: ₱2,050 Supplementary: No annual fee for the first approved cardholder | 3% | ₱850 or unpaid minimum amount due, whichever is lower | NA |
10.AUB Classic Mastercard
KEY FEATURES AND FEES | ||||||
| Maximum supplementary cards per account | Age requirement for supplementary cardholder | Minimum monthly income requirement for principal cardholder | Annual fee | Interest rate | Late payment fee | Overlimit fee |
| No limit | At least 14 years old | ₱50,000 | No annual fee for life for both primary and supplementary cardholders | 3% | Monthly option: ₱1,000 or the unpaid minimum amount due, whichever is lower Semi-monthly option: ₱500 or the unpaid minimum amount due, whichever is lower Weekly option: ₱250 or the unpaid minimum amount due, whichever is lower | None |
Guiding teenagers to learn financial responsibility through the use of credit cards is a proactive approach to preparing them for the complexities of adulthood.
The selected credit cards should offer a balance of educational support, parental controls, and rewards to ensure a positive and enriching financial learning experience.
By instilling these values early, we empower the next generation with the tools necessary for a secure and responsible financial future.