Just for Teens

Yes, teens can get... or get access to... credit cards and debit cards. Under most state laws, for example, you must be at least 18 years old (a young adult) to obtain your own credit card and be held responsible for repaying the debt. And if you're under 18, you can qualify for a credit card if a parent co-signs, but only the parent can be held accountable for the payments.

Credit and debit cards can be good ways for teens to pay without carrying cash or checks, and they can help teach kids about how to manage money. But teens—and their parents—need to be especially careful to avoid serious debt problems or a bad credit record at a young age.

First, make financial education a priority, especially the lessons about borrowing responsibly. "Teens need to be aware that a bad credit record can affect their ability to rent an apartment or even find employment after graduation," says Lynne Gottesburen, an FDIC Consumer Affairs Specialist.

Also, understand the alternatives. There are cards with features sometimes described as "training wheels" for young cardholders. One is a credit card with a low credit limit—say, $300 or $500—which can keep a teen from getting too deeply in debt. Another is a pre-paid, re-loadable payment card that parents can get for teens aged 13 or older and that comes with parental controls, including spending limits. A debit card also enables a teen to make purchases without paying interest or getting into debt because the money is automatically deducted from an existing bank account.

Just for Seniors

Having a credit card is a necessity for most senior citizens. Among the reasons: A credit card can be used to pay for emergency expenses and medicine. And, a card may be required to rent a car or book vacations.

However, debt overload can occur when senior citizens trying to live on limited income run up significant credit card bills and interest charges. The basic advice: Try to keep credit card purchases manageable. If possible, pay off most or all of your credit card bills each month. Consider a debit card as an alternative to a credit card. Also, the elderly often are targeted by swindlers who try to trick them into divulging credit card numbers and other personal information that can be used in a fraud. For tips for avoiding card fraud, see "Fighting Fraud: Simple Ways to Protect Yourself."