Tuesday, November 30, 2010

Are Debit Cards Good For Your Teen?

Like most teens, James is far less financially capable than your average adult. This is because he is young, financially dependent on his parents and just doesn't have enough experience in handling money. However, sooner or later, he will have to depart from his parents' care. He has to go to college or go live his own life. It is inevitable, he will soon be on his own.
When he embarks on this journey, he must become independent from his family and make a life for himself. This includes choosing the right career path, saving and budgeting efficiently and establishing himself within society. In short, his success or failure in the future will solely depend on his abilities. He then needs to be a good decision-maker and take care of his finances.
But for now, while he is under his parents' care, they take great part in shaping his future. It is up to them to ready him for certain life challenges, one of these challenges being finance management. In the future, James must know when to splurge and when to save. His parents' training will greatly influence him on this. There are many ways in which they can shape him into becoming a a good saver. One of these is by letting him handle a job. Just like other kids in their teens, James can undertake a job in the evenings, or over the summer holidays.
Through this he will learn the value of hard work ethic, obeying company rules and managing ones finances. When it comes to money, James should handle his work finances himself. This includes paying his mobile bill and even owning his own debit card. Sooner or later he will learn to put aside savings, pay bills on time and only spend money on necessities.
Other parents tend to assist their teenagers far too much in this crucial point of their progression into adulthood. They lend their kids their credit cards. But as they have surely learned by now, credit cards cause debt. It also shrouds the mind of a supposed-power to purchase. However, it only fools people in to such thinking. Credit cards are nothing but debt with interest rates that needs to be repaid on time.
A debit card, however, is far different. It uses the funds on a person's account therefore there is no lying. Whatever a person spends, it is his own hard-earned money. Mentally, debit cards benefit through the lesson of "living within your means". When one exposes their teenager to such an idea, he will carry it with him for life. He will always have the notion to spend his own money and buy only what he can afford. So by exposing kids to the benefits of debit cards, parents are preparing their loved ones for a financially wise future.

Four Ways Credit Cards Can Help Your Finances

Credit cards are often painted as being, more than anything else, the bringer of debts and misery to consumers. They have remained a popular product for many years, though, not because they are sometimes used badly but because they are often used well.
Know what you're doing and what you want and cards can be an excellent supplement to current accounts, personal loans and even to your everyday purchases. When you go to compare plastic you'd be forgiven for thinking that they are for one things and one thing only: borrowing money in the short term.
This is because laws on advertising cards mean that they have to advertise the typical variable APR, that is, the interest rate on borrowing more prominently than any other offers.
There are even rules on how much bigger the font of the interest rate needs to be. However, since most credit cards have an interest free period of around fifty days there is no need to pay interest at that high rate when borrowing in the very short term. Since that's much cheaper than going into most planned overdrafts and all unplanned overdrafts this is the first way that credit can help your finances.
A second way should be on your mind when you compare personal loans. In this case, some loans can be paid back early without there being a penalty to the holder of the loan for doing so. If you go for this sort of loan then you could use a super balance transfer offer to pay off the loan and then pay the balance transfer back at 0%, potentially saving hundreds in interest fees.
The third point is that cards can be used to make money and thus to supplement income in a similar way to investments and savings accounts. For example, when you go to compare savings accounts it might be the case that you could spot one offering a high rate for the length of an interest free offer. In that case, while the money is the savings account earning money it isn't accruing interest for the borrower.
The forth and final point is that credit cards can make money in another way: through rewards. This will only be relevant to those who spend a lot of money throughout the month and it'll be especially relevant to those who spend a lot of money in just one store which has its own rewards scheme.