Tuesday, January 25, 2011
Recently published a story on CNN on a three year old child received a credit card offer. When the parents faced American Express, the company that issued the card listing, a company representative admitted to making a mistake in sending the offer to someone remotely qualified to receive. Interestingly, when the representative of the American Express tried to explain the rules of how credit cards really worked, they point out that the child was 13 years or older than the child would have been eligible for an additional cardholder as her parents were American Express cardholders.
While it may be ridiculous to most people that a three year old access must have their own credit card, it is really not any better that a thirteen year old has the same access legally provided that their parents provide a signature? The line for 13 and older cardholders brought the parents on the line for the entire bill regardless of which card holder made the costs, unless of course they were fraudulent. Parents will be fully responsible for any charges on the card and not the child specifically.
Society has today children as young as six have their own mobile phones, their own laptop computers, full access to the Internet, social networking websites and technology that their parents not at their age can fathom. Are credit cards just a thing considered as a “normal” part of childhood? Are credit cards really a need for young children in this day and age?
An argument can be made that excessive credit card expenditure by a thirteen year old comes back to haunt of the parents. It is the parents who initially consent to a holder of the card to their young teen should give and in the end it is a responsibility of parents to know what their child is doing, where they are spending and how much they spend when they gave their consent. Parents unaware or those who do not have a lot of concern about how their young teen spends on credit can be said that their child deny an important lesson in early financial responsibility, in particular with regard to credit.
Older teens will no longer be able to apply for their own credit cards until the age of 18 according to the new rules for young people of most major credit card providers without a co-signer. Credit card companies are still still ask for the younger generation with listings to find them that co-signer and secure a credit card. Many card companies use their prepaid debit cards to entice younger spenders to entering the world of credit. Credit card companies say they offer and their prepaid cards to young people to promote as a means for early financial education.
However, unless parents giving the financial lessons, children are not likely to get it somewhere else. Even older children who are legally allowed to sign up for credit often have no idea about the credit impact will have on the rest of their lives. Rarely do they understand how much a prepaid actually costs when costs are processed. Teenagers tend to think more about what they buy instead of the functioning of the financial part of the transaction, especially if these are supported financially solely by their parents.
Heading off disaster
It turns out that the three year old that had the credit card proposition was requested because of a mail order received they addressed to her. Retailers, online and off, sell such marketing lists to credit card companies. The map suppliers in turn as a result of their homework to find out who is eligible to receive credit card offers. Since not all marketing lists birth data, sometimes an individual receives not remotely qualified to receive a credit card a direct quote. In most cases be ages verified before mailings be sent but mistakes happen.
Offering a credit card to a thirteen year old seems unreasonable, but again, without the consent of a parent, access to the card is prohibited. There may be some cases where a teen might fraudulently sign up for a credit card, but credit card companies are relatively well on the capture of such activities. In reality, a person of any age can apply for a credit card by using false information and teenagers not on a specific threat in this area.
As parents of a child as young as thirteen agreed to hold a credit card, financial education is a must. The five years prior to the teen turning 18 can be a perfect time to solidify the financial foundation that every American should be. Learn the basics of credit card management, interest rates, and billing cycles to a child as young as 13 can be done on an age-appropriate way that is the basic building blocks for giving personal finance lessons run-up to young adulthood.
Rules should also be place in those addresses spending limits, expenditure purposes, and the arrangements for financial return. A child who makes purchases on a credit card at least may be expected that a portion of their allowance to the Bill. Children should understand that spending on credit financial consequences. There are no hard and fast rules for how credit card standards and each family needs to make their schemes as what they see reasonable.
If you are a parent of a young teenager, could you conceive of handing over a credit card to a 13, 14 or 15 years old? What kind of rules would set? Let us know how you handle your teens and credit. We would like to hear more discussion about this topic of parents and teens alike.


Wednesday, 26 January 2011
It used to be that only cardholders with beau-coup money were the only ones who access to concierge service offered by some card issuers could get, but nowadays these ‘ luxury ‘ service is not limited to the rich and famous. Many cards offer the program to average cardholders who make use of the service may 24/7.