Teens and credit cards

It wasn’t that long ago that a friend was telling me about this fiasco that happened with her daughter. For her birthday, her daughter had requested Visa Gift cards from all of her friends and family. She mentioned that it was easier to purchase a jacket she found online if she had the gift cards. And so everyone that gave her a present gave her one in the form of a Visa Gift card.

It was several weeks later when my friend overheard her daughter talking on the phone to a friend, excited because she had received a package in the mail. But my friend realized she’d been had when she heard what it was that her daughter had ordered – a water bong.

I’m not going to say that teens in general cannot be trusted. But basically, when you give a teenager a credit card and a whole entire internet, they have the freedom to buy ANYTHING they want – whether it’s legal or not. There is no way to tell how old they really are when a screen sits between them and the online retailer. Give them a Visa Gift card, anything goes. It’s even worse if you just hand them your own credit card, because then they have the opportunity of recording that number and using it at will.

Recently there was a buzz about the Kardashian Kard. This was the prepaid credit card that parents could supply their teens with, just loading it with their allowance or gift money so that teens could buy things using a credit card. Only problem? The fees were so ridiculously high that this Kard didn’t make a lick of sense. Inflated upfront costs and high monthly fees, a replacement fee, and a cancellation fee… A teen could go broke before even using the card at all.

But being that this is the age of technology, let’s face it – teens are bound to want the freedom to purchase items online just as much as they would inside stores. And that means that a credit card can be necessary.

I was recently informed of a website geared towards teens, giving them the ability to purchase items they need, but also allowing parents to be involved with the purchase. It’s called BillMyParents.com, a site that has teamed up with several companies and promotes communication between families when it comes to learning the ins and outs of financial responsibilities. Through “Supervised Shopping”, younger teens can find still have a freedom to shop for themselves, but with their parents in the background of each purchase. “Kids can browse on partner sites like PacSun.com and pick specific items, colors, sizes and send an email to their parents and other family members to request things,” Jim Collas, president of BillMyParents.com, explained. “Parents get the email and can see exactly what items their child is asking for, and they can modify the list if desired and then complete purchases if they see fit.” And during all of this, kids never have their parents’ credit card information, their parents are still involved in the purchasing process, and both the parents and the kids have full access to the entire transaction process.

BillMyParents.com also has a reloadable prepaid Mastercard for trusted teens, much like the Kardashian Kard, but without the exorbitant fees. First of all, there is no activation fee. And the monthly charge is kept incredibly low to ensure that teens are not being ripped off, but still gives them the reality of what having a credit card is like. These cards are accepted online and out of the house, but parents and teens are both alerted whenever a purchase is made, allowing parents to be informed of their teens whereabouts, what they are purchasing, and which stores they are buying things from.

The card is geared towards teens aged 13-18, and is intended to be a tool in helping them on their way towards financial freedom. In essence, the reloadable prepaid debit card is “like a credit card with training wheels,” as Collas stated. “(There are) no credit implications for either parents or teen cardholders, but our program gives the safety and convenience associated with a credit card. The limits are set completely by parents and every transaction is recorded for easy reference. It’s a great tool for families to discuss appropriate spending and budgeting.”

It’s safe to say that if my friend had used a prepaid card that gave her an alert about what and where her daughter was buying things online, her daughter would have either chosen not purchase it, or my friend would have known about the drug paraphernalia before it was even shipped to her house.

Would you let your teen have a credit card? What if it were something like this that allowed you a little more supervision over their purchasing habits?

 

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4 thoughts on “Teens and credit cards”

  1. I think this is honestly a really good idea.
    I avoided getting a credit card for years, for fear I would not be responsible with that kind of ‘free money’…only to discover when applying for student loans that, without a credit history I was as good as non-existent. So, I had to get a credit card. Which helped me not at all, as, being a poor college student, I took advantage of the ‘free money’ every time I got my card paid down a little and once it was maxed had trouble finding money to send the company who eventually deactivated it and still expected me to pay them (*pout*).

    It seems that, in this day and age, having a credit card is not something that is really avoidable…and, that being the case, learning early and with parental supervision seems like the best way to do it. I don’t know if this will keep teens from finding ways to buy that trashy dress or pot leaf sticker on the DL, but I certainly think this is a good idea, regardless.

  2. I honestly wish my parents had educated me about credit, interest rates, minimum payments, etc. I got into huge trouble in my early 20’s when I was released “into the wild” and moved to LA where every single store had their own credit cards. There are A LOT of stores in LA! Now, with the internet, there’s even more ways to get into trouble. I think the credit card with training wheels is a great idea.

  3. I think these teen prepaid cards are great. Our friend got one for their teen daughter and recommended one called myplash, so we got one for my 14 year old son because he always asked to use my credit card to buy stuff online, and kept loosing the cash i would give him…or so he said. You just have to find the one with the best fees and the myplash card i got him has really low fees and I can check online to see where he has been spending the money we give him.

    This card is a great tool for me and my husband to manage his money. He loves it becuase myplash had all kinds of images to choose from on his card that he wanted, and it doesn’t charge overdraft or other bank fees which in the long run cost way more than the fees on his card and for sure would be the norm as he thinks money grows on trees. This way we put $50 on his card and thats it. when its gone its gone.

    He is learning how to budget himself, shop online without my card and sees money doesn’t grow in his dads pocket. These products are great just like cell phones for teens. Think about how we all were afraid of that and now we make sure our teen has theirs at all times. Bravo to the companies that thought of this. not sure about bill my parents, but our son and our friends daughter carry a myplash mastercard.

  4. Oh man. I didn’t even think about My kid + Credit Card. I’m going to have to save blogs like this for when she’s older. Unless you have a magic spell to keep her at age 5 forever. That would be awesome. Yesterday at school they had a gift fair where you can send your kid to school with cash, and they can buy gifts for their family members (most available gifts were under $5, though some went up to $10). It’s a way to teach the kids to budget money and let them pick their own gifts for their parents, learn the value of $1, etc. So we sent her with $20 and instructions that she can spend up to $5 on each of her grandparents. She came home with 4 tiny gifts ~ A small plastic kitten for my husband’s dad, a small plastic puppy for my husband’s mom, and a tiny stuffed animal for my parents. As for teaching her to budget money? She hands me the envelope with her $6 change inside, and says, “And look mom, I paid for my presents, and the lady gave me MORE MONEY back. AND she gave me the presents!”….And she looked at me like, “I hit the lotto!”….Sigh. I think addition and subtraction begin next year 😛

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