8 Surprising Teen Credit Card Statistics

Parents may be skeptical about giving their teens a credit card for fear of the debt they may rack up. But there are more financial benefits than downsides to consider.

With the right guidance, a young adult who has the opportunity to use a credit card in high school and college can learn how to manage spending and start building healthy money habits that lead to greater financial success later in life.

Not to mention, a credit card allows teenagers to establish and build credit, which will be essential when it comes time to rent an apartment, buy a car, or open a utility account in their own name.

Whether you’re ready to give your kid a credit card, here are 8 surprising stats about teens and credit cards all parents need to know.

Six in 10 parents said they’ve given their children permission to use their credit or debit card to make purchases.¹ While there are a variety of factors at play, parents should consider the upside to teaching their teens how to use a credit card wisely before their child moves out on their own when they’re more likely to make poor decisions and rack up debt.

Money is often a source of friction in many relationships, even between parent and child. In fact, nearly half of parents (48%) said they have argued about money with their kids, citing credit card use without parental permission as the most common disagreement (44%).¹

It’s easy for teens to make purchases on a credit card without parental permission thanks to how payment info is stored in online retail accounts and mobile applications, something more families are dealing with these days.

Twenty-two percent of parents surveyed said they caught their children making secret purchases with their credit or debit cards which racked up an average balance of over $620.¹

About 69% of children younger than 18 blamed the unauthorized charges on saved payment methods.¹ Setting strict boundaries and teaching teens how to use credit cards wisely is essential to avoiding messy spending situations like this in the future.

Many parents struggle with the decision to give their teens access to a credit card. In fact, 48% of parents have second-guessed their decision to allow their kids to use their credit cards.¹ 

But with proper guidance and a clear set of rules on spending limits, parents can help teens develop healthy credit card habits that can lead to better financial outcomes later in life.

Dads are slightly more likely to allow their kids to use their credit cards. About 64% of fathers say they are willing to allow credit purchases compared with 54% of moms. However, only 10% of parents give their kids unlimited access to their credit cards.¹

Young adults may be addicted to tech, but not when it comes to making purchases. Thirty-eight percent of teen survey respondents said cash was their preferred payment method.² Meanwhile, only 2% of those surveyed said they would rather use a fintech app like Zelle, Venmo, or Apple Pay to complete a transaction. 

Most teens (71%) said they receive a gift of money from parents or caregivers in the form of cash. That’s down to 57% today.

The opportunity to use those dollars to pay off a credit card purchase, build credit, and establish healthy spending habits is lost here.

While cash still rules, US teens are quick to adopt fintech apps and ignore other traditional payment methods like credit cards. Over the course of a three-year period, from 2019 to 2022, there was a 6% drop in credit card use among teens as a result.² 

Gen Z is a very credit-savvy generation, even more so than some of their older cohorts, according to the Global Gen Z Report from TransUnion. In fact, the report found that 50% of this age group (between 18 to 24) has a prime or above credit score surpassing millennials when they were the same age.³

Getting a teen a credit card isn’t difficult, but it’s important to understand the laws established to protect minors first.

Specifically, the 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act bans credit card companies from authorizing anyone under the age of 21 to open a new account without an adult cosigner or proof of sufficient income that would be needed to repay debt.⁴

Few credit card companies issue credit cards to teens under the age of 18, even if they’re able to provide these two requirements. For many, the best approach to get your teen a credit card is to add them as a secondary, authorized user on your account. 

A secondary or authorized user can use the card to make purchases and will benefit from the primary account holder’s credit score.

Authorized users are not responsible for payment of balances by the credit card company, so it’s imperative that parents monitor purchases closely and set strict rules about how their teen can use the card and how much of the bill they are required to pay.

¹ 2024 LendingTree Kids and Credit Cards Survey

² 2022 JA Teens & Personal Finance Survey

³ TransUnion Global Gen Z Report

⁴ FTC.gov Credit Card Accountability Responsibility and Disclosure Act of 2009, 123 STAT. 1748