I am the parent to one child and one young teen, and I don't want either of them to be able to apply for credit (and potentially soil their credit ratings) before they are mature enough to take on such a substantial responsibility.
Yes, there has to be some education of them on my part, but I'd also like to know that there are checks and balances in place to ensure they can't do anything that could hurt them, before they're old enough to understand the impact of credit.
New legislation in the US aims to protect young borrowers. (Just what you were hoping!)
See Title III here.
My understanding of the new law is that individuals 18 to 20 years old applying for a credit card are required to either 1) have a parent/guardian co-sign, 2) prove they could independently repay the credit being offered, or 3) take a special financial education course for young consumers. It also requires parent (or legal guardian, spouse, etc) approval for a credit limit increase on a card that is co-signed by that parent, etc.
I don't know about other countries, but in the UK you need to be 18 before you can (legally) get into any kind of debt. Though there have recently been calls to raise that limit to 21. I personally don't see how that can be allowed when student loans are taken into account.
A debt management agency in the UK is calling for the age limit on credit cards to be raised from eighteen to twenty-one, stating that issuing credit cards to those in their late teens is promoting a culture of debt from an early age. The agency claims that making consumers wait until they are twenty-one before enabling them to get a credit card will allow them to learn more about the dangers of debt, and will result in the cards being used more sensibly and responsibly by younger spenders rather than being used to spend erratically.
In Canada in order to sign an agreement for any credit card application without a co-signer you must have reached the age of majority in the province you reside in. Here's a sample online application from one of the major financial institutions.
Hopefully this provides enough time for your children to develop financial maturity. :-)
