Did the cancellation of the Kardashian Kard have you drawing a huge sigh of relief that your kid won't be asking for one? Not so fast, Mom and Dad. The pre-paid debit from Khloe, Kim, and the gang was just one fish in a big ocean.
From Bill My Parents to Visa Buxx, which are both aimed directly at teens, to the standard "do you want to save X percent by opening a credit card" spiel they get at just about every store they shop this holiday season, our kids are being pushed on the promise of plastic harder than Benjamin Braddock in The Graduate. So what if you were told sometimes it's OK to give in.
I'd be the first to say you're nuts. Thinking of my (currently only 5-year-old) daughter letting loose in a mall with a charge card in her wallet is enough to make me hit the chocolate, hard. As finance expert Erica Sandberg, author of Expecting Money: The Essential Financial Plan for New and Growing Families, told The Stir, kids need to become "masters of cash" before they can manage the responsibility of credit. Some adults can't even do that.
It's easy to brand parents who will give their kids a credit card as irresponsible, even lazy. But I'm the first to say I'm being a bit of a hypocrite here.
I graduated from high school at 16 and left home for college. My parents didn't have much of a choice; it was give me some sort of access to credit or have me on the phone with them constantly calling for them to buy my books or mail me groceries. Their decision was to grant me access to my checking account via a debit card that could act as a credit card. I was limited to the funds that were in the account, but I could use it in a city where it wasn't always practical to carry cash and where personal checks were not going to be accepted.
Responsible kids exist. Situations that call for teens with credit exist. I can't make a blanket statement that it will work for every kid, but I can't prove the inverse either.
As my friend Kristal says, her daughter has had one connected to her checking account since she was 10, and she never ever uses the card. "We wanted her to manage her own money at a young age with our supervision so when she went out on her own she had experience with a check book and credit card and didn't go crazy charging everything in sight and maxing out the cards," Kristal explained. "She is the exception to the rule!"
You can make it work, Sandberg says. Avoid the pre-paid cards (like the Kardashian Kard) if you can because they usually carry hefty fees, she advises. Keep your name on the card (kids under 18 can't legally sign contracts, and you shouldn't trust a company that would let them), and read the statement every month. As soon as there's a problem, you'll know it -- and you can cancel the card. Only put them on cards with a low spending limit.
Not sure if your kids will sink or swim and not willing to take the risk? Try a pre-paid gift card rather than a charge card. Make your kids keep receipts, and you can track how fast they spent and what they blew the money on. If they can't hack it, they proved my "grab the chocolate" response was right on the money. But if they do OK they might be one the exception that proves good parents can use credit cards as a teaching tool too.
Would you give your kid one of these?
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