Your teenager may have a subscription to Seventeen magazine and receive the occasional birthday card from Grandma or Aunt Jane, but have you also noticed an increasing amount of credit card companies sending your teen mail? Credit card companies are soliciting high schools students at an alarming rate, and with the average national credit card debt of college seniors totaling more than $4,000 according to the Wall Street Journal and Sallie Mae, many parents are wondering: should my teen have a credit card?

According to Jump$tart Coalition, a promoter of financial literacy for students, one in every three high school seniors reports using a credit card. Are these teens learning financial responsibility, however, or heading down the slippery slope of dangerous spending and debt? Many would agree that it all depends on how credit cards are introduced and whether parents teach their teens the value of money and responsibility of using credit.

Building a Credit History

While many consumers use credit as a method of convenience, their main purpose has always been to establish a good credit history so that one can qualify for car loans and mortgages, rent an apartment, or lower their insurance premiums. In fact, it can almost be detrimental for a college student to graduate without a credit history. If someone has never had a credit card, it makes it much harder to rent that first apartment or even apply for certain jobs that require credit checks. However, worrying about your teen’s future employment should not be a parent’s automatic green flag to co-sign for a credit card.

Introducing Your Teen to Credit

The first step towards good credit for you teen should be opening a checking account. Most student-free checking accounts come with a debit card, which is a great opportunity to introduce plastic, learn how to deposit money, set a budget, and write checks. Depending on your family, teens can deposit their own money from part-time jobs or gifts, or parents can deposit a limited amount each month as an “allowance.” Teens might spend their entire monthly budget in their first week, but will soon realize how easy it is to swipe a card and watch their money quickly vanish. When this happens, it is the perfect opportunity for parents to reaffirm the importance of balancing a checkbook. Should a teen overdraft their account, parents can also choose to either link the teen’s account to their checking to avoid fees, or have their teen pay their own overdraft fees to re-emphasize the importance of tracking their money.

Finding the Perfect Credit Card

Before parents even open the credit card offers, it is important that their teen understands the value of money, is responsible in other areas of their life (academics, household chores, extra-curricular activities), and has a means to pay their monthly statement. Ideally, the student and not their parents should be the one writing the check every month to pay the balance. Remember, your teen’s irresponsible spending can affect your credit score, if you’ve co-signed for their card. Under the Credit Card Accountability, Responsibility and Disclosure Act of 2009, young adults under the age of 21 have to prove they have “independent means” to repay their credit cards or must co-sign with an adult. So, if your teenager doesn’t have a job, remember the burden of debt may fall to you.

Parents should also discuss what types of purchases are appropriate. For example, anything you eat or drink is something your teenager should pay for with cash or debit, and not with a credit card. Setting ground rules and modeling responsibility will be the key to your teenager’s success.

Prepaid credit cards are also a great alternative, offering teens flexibility and spending independence, while also teaching them financial management. The Visa Buxx card is one option, allowing money earned by allowances, chores, or gifts to be loaded onto it electronically. The card also provides text messaging and email notifications for parents and teens about card activity. When shopping around for prepaid credit cards, just remember to be aware of sneaky fees.

Dotting Your I’s and Crossing Your T’s

Most young adults find themselves in credit card debt because they were poorly educated on the subject and do not have a clear understanding of how credit works. The bottom line is that teens should learn to use credit cards as a tool for the future, not as a means to own the latest trends or impress their friends. Credit cards should be viewed as a convenience and not as an additional income source. Educate your teen on the basics, explaining credit limits, due dates, late fees, etc. Discuss your expectations and, if possible, sign up for online access and alerts to your teenager’s account. Most importantly, be prepared to close the account if necessary. If your teenager quickly maxes out the card or frequently pays the bill late, then they are not ready to handle the responsibly of a credit card. Canceling their card now, before they can continue the damage, is the smarter choice in the end.