Here’s One Way to Teach Teens Credit Card Basics

Do you want to teach your teen how to responsibly use a credit card, but don’t want to open a new account in their name? One available feature allows you to grant another individual use of your account while you maintain oversight.

Many credit card companies and issuers, including PNC Bank, allow you to add an authorized user to your credit card account..

“There are several benefits to adding authorized users to existing accounts,” said Todd Rosenthal, general manager of credit cards at PNC Bank. “Chief among them is an opportunity to teach good credit card management and monitor a child’s spending.”

Another benefit is that your teen begins to build credit history because card issuers report to the credit bureaus. Potential authorized users must provide their birthdate and full Social Security number to be added as an authorized user. Also, rewards from multiple cards on one account are commingled, which may help you reach your household’s rewards-related goals quicker, Rosenthal added.

Also, parents have peace of mind of knowing their child has access to credit in case of an emergency, Rosenthal said.

However, Rosenthal advises that account owners should be aware of limitations. Trust is paramount because although parents may monitor spending, they cannot control activity on card.

“It is important for card owners to understand that the authorized user has access to the full credit limit, and it is not possible to place a spending cap on the child. However, as the account holder, you can establish alerts, which allow you to oversee usage,” Rosenthal said.

“Monitoring card usage can lead to meaningful parent-child conversations about responsible decision making and spending habits,” he added.

 You can add an authorized user to your PNC credit card account through PNC Online Banking or PNC Mobile, by visiting a branch or calling the customer card center. The authorized user will receive a card in his or her name and they will be able to use it at any time. You also have the option of removing that user at your discretion.

Keep in mind that with PNC accounts, authorized users have access to other activities on the account, including retrieving account information, making payments, initiating a dispute and requesting fee removal. Other banks may have different policies.

However, there are some activities authorized users may not do with PNC accounts. These activities include using or ordering convenience checks, ordering additional cards, enrolling in online banking, redeeming rewards, obtaining a real-time PIN, requesting a balance transfer, closing or reopening an account and locking or unlocking the use of the account.

If you are looking for a convenient way for a young family member to learn to use credit cards responsibly, adding him or her as an authorized user may be the ticket to success.

On joint accounts, both users are equally liable for charges, while on accounts with authorized users, the single account owner is liable for all transactions. – Todd Rosenthal