Teen Money Canada

Note: This was originally published at the beginning of September, 2009. All prior articles were published before this at various times. This is the final article transferred from the old blog, and everything following this will be new. Enjoy!

Sorry about the (unexpected) hiatus. I went on vacation to California and a local island, and seemingly forgot to post about it… even though I was almost sure I had!

I’m back for good now, and am very much dreading the return to school in a little over a week. The only good thing(s) about it are that I’ll be able to see friends who I haven’t seen a lot of over the summer, and I’ll be able to start making some money again!

Now, enough about me, and on to the article! Around two days ago I discovered that I am legally able to get my own credit card, as long as someone over the age of majority (e.g. my mother or father) co-signs with me. Now it’s pretty much every teen’s dream to have his or her own credit card… spend money anytime you want, anywhere you want, and AS MUCH as you want, right?!

Unfortunately, it’s not that simple. Contrary to popular belief, credit cards are not the source of an unlimited amount of money. A better way to describe them is: ‘a source of an instant loan which must be paid back by the end of the month, lest you invoke the wrath of a multi billion dollar company that charges 20% interest.’ Yeah, pretty depressing isn’t it?

Despite this grim possibility, credit cards can really be a great thing. They’re basically letting you use their money for a month at NO interest (provided you pay them back immediately). This means that YOUR money can be used for whatever you want: you can let it sit in your high interest PC financial bank account (which you should have if you’re following my advice) and gain a dollar or two a month; invest it in the stock market (kind of risky); or just gloat about the fact that you’re burning the credit card company by not paying any interest.

Now this is all fine and dandy, but unfortunately for us teens under eighteen, we can’t start to build credit until we hit the age of majority (which differs throughout the provinces). I called three different credit card issuers (CIBC, Vancity & RBC, who are all Visa) and went in person to speak to a PC Financial salesman/whatever you want to call them, and they all said the same thing: “Your credit (report) does not exist until you turn eighteen.”

Despite the fact that I am getting my Dad to cosign on this card with me, I found out that, contrary to my prior beliefs, I am not able to receive and pay my own bill. The best thing I can get is my own name on my card & bill — whoop dee doo! According to this site: http://financialplan.about.com/od/studentsandmoney/a/TeenCreditCards.htm and many others you can find by simply typing in ‘teen credit cards’ on Google, teenagers ARE allowed to get a credit card, get their own bill, and develop their own line of credit: provided the card is cosigned with an adult, blah blah blah. The only reason I can see that the institutions I spoke to would be against doing this is because these articles are American, and laws are perhaps different in Canada — don’t take my word for this, though, as I haven’t looked into that aspect of it.

This article, as you could likely tell from the title, is going to be a two — if not THREE part ’series’. I’ll have the next part up fairly soon.

On a side note, I went to the AC/DC concert on Saturday night in Vancouver (this was in August)… this leads up to my next article (following the credit card series?) on Controlled Spending.

Until next time,

Austen.