Monday, April 03, 2006

At What Age Is A "Card" Appropriate?

Michelle Singletary is not happy. The Washington Post personal finance writer had her 10-year-old daughter return from a birthday party requesting a prepaid Hello Kitty debit card like those she saw the birthday girl for presents. Singletary's response? No way.

I both agree and disagree with Singletary. I agree that the debit's card's fees make it a poor financial product -- there's no reason to spend $10 a month for the pleasure of having Hello Kitty on your card as a 10-year-old.

But Singletary's beef is more with the fact that these cards are like training wheels for credit cards, encouraging kids to join the plastic society that too often leads to burdensome debt. I see her point, but eventually most people do start to use credit cards, so at what age is it appropriate to use some sort of debit card as training wheels, or should they be forbidden until adulthood.

Singletary calls credit cards "evil" and the "plastic devil", so it's easy to see where she comes down.

I agree that no ten-year-old should be using plastic of any kind, but I'm not sure where the line is. Once college comes around, kids can get cards without their parents having anything to say about it. Is it better to let them have some experience with how credit (really, debit in most cases) works before they start charging pizza and textbooks?

Whaddya think?


At 10:06 AM, Anonymous Anonymous said...

I think when a child is old enough to earn "real" money (not just an allowance) then let them try the cards. This way, the money they earn isn't funded by mom and dad (so they are limited by what is earned in each paycheck) but the parents are available to guide them through the use of plastic vs. cash in hand. This assumes the parent has already taught the child basic budgeting and savings (this can be done at the allowance stage if the child is permitted to buy her own treats or little toys.)

I don't think a real credit card is at all appropriate for a child but a debit card can be a good training model. As the age a child can get a real job is around 14-15 (with a work permit) then that's the age. Definitely before 17, because that's not giving them a lot of time to make mistakes/learn from them. I think that sometimes the best lessons are learned from bitter experience, but the consequences can be lessened if the child is still at home.



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