By Don Riley/Network Indiana
3/10/2010
 Deciding when your child should have a credit card is a hot topic with parents. But most experts agree that financial literacy is the key to using a credit card responsibly.
Mark Tarpey with the consumer credit division of the Indiana Department of Financial Institutions says most people aren't financially literate. He suggests some form of financial literacy begin in elementary school math classes and continue through high school.
Instead of a credit card, Tarpey prefers teens learn to manage a debit card first, where their purchases are deducted immediately from their account.
After learning to manage a debit account, the teen could become an authorized user of a parent's credit card. That would teach them that credit just delays the payment of purchases for 30 days before interest begins to accrue on the unpaid balance.
By the time they reach college or are out on their own, they could apply for their own credit card account, with a better understanding of how to avoid runaway spending and the crippling debt it brings.
Under the new federal law, credit card issuers are banned from issuing credit cards to anyone under 21, unless they have adult co-signers on the accounts or can show proof they have enough income to repay the card debt.
Credit card companies must stay at least 1,000 feet from college campuses if they are offering free pizza or other gifts to entice students to apply for credit cards.
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