What Teens Are Spending Their Money On - TheStreet

A new survey about teenagers' spending habits provided good news for Exxon Mobil (XOM) - Get Report, but bad news for Abercrombie & Fitch (ANF) - Get Report: Gasoline has surpassed clothing as teenagers' No. 1 credit-card expense.

A poll of 712 teenagers conducted by Junior Achievement and

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also found that a larger portion of teens are using credit cards -- 10.4% vs. 8.5% a year ago.

The findings show that the double-barreled blast of high energy costs and credit-card debt has reached teens' piggy banks. But mostly, it has further drained parental pocketbooks, since the study also found that bills are being paid by parents more often than in years past.

"Rising gas prices are impacting teens as much as they are their parents," says Jack Kosakowski, president of Junior Achievement USA. "The question is, are the teens paying off these cards, or are they passing the debt on to their parents?"

In the most recent survey, about 69% of teens said they use credit cards for gas, up from 52% a year earlier and 46% in 2006. Gasoline now tops the list of things teens are charging, above "clothes," which had led the list in previous years.

Joleen Martis is one teen whose style has been crimped by surging fuel costs. She budgets $80 per week for gas to fill up her

Honda

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Pilot SUV.

"It wasn't always that way -- I used to try to shop here and there but since gas prices are high, I don't really shop as much," she says. The 17-year-old Rahway, N.J., native has a part-time job at Best Buy and spends most of her cash on fuel and food, but keeps a side-stash in case of an emergency or necessary shopping spree.

Mario Posada, a 17-year-old from Alexandria, Va., says he used to be able to fill up the tank of his family's

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Camry for about $20. Now, that barely covers half the tank with a national average price of $3.79 per gallon, according to AAA and the Oil Price Information Service.

"Usually if I had money, I'd just buy clothes or shoes," says Posada. "Now I don't have any pocket money anymore." He estimates spending about 50% to 60% of his cash on such items, down from 90% a year ago.

Junior Achievement suggests that parents discuss proper use of credit cards with their children and outline a budget that factors in the higher cost of energy. If your kids are responsible for paying their own credit-card bills, discuss interest charges so that they don't get in over their heads. (Over 30% of teens admitted they were likely to charge something they "wanted very badly," even if it took a year or more to pay off, and cost "substantially more" due to interest charges.)

The younger you discuss debt with your kids the better, because teens are more likely to acquire credit cards the older they get: Only 5% of those who are 13 or 14 report using credit cards, compared with 22% of those who are 18 or 19. As teens leave home for college and face higher costs, they're more likely to get into credit-card trouble. That's especially the case with the slew of student card offerings from major banks like

Citigroup

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,

Bank of America

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and

JP Morgan Chase

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, and credit-card companies like

Visa

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,

MasterCard

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,

American Express

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and

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.

Madeline Wise, an 18-year-old high-school senior, shares a credit-card account with her two parents. She has cut back on driving and started carpooling with friends more frequently as gas prices have risen. ("I drive till I'm practically empty," she says. "I hate seeing that $50 every time I go and refill my car.")

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Madeline's card is used mostly for food and to fuel up her Volvo S60, though her parents handle the bills.

"They don't give me an allowance, but it's sort of understood that I don't buy anything ... too expensive without checking in with them first," she says. "I don't like racking up a big bill because it comes in the mail and I have to explain everything."

Madeline says the concept of interest charges is still "over my head," though the family plans to have a discussion about budgeting and the cost of debt before she heads to college in the fall.