I have written a few blogs in the past discussing obtaining credit cards for children. In those blogs, I was referring to credit cards that are specifically designed for children and that are applied for with the approval of the child’s parents. There is a whole other scenario, however, that I am not a fan of. This scenario is when pre-approved credit card applications are sent to minors.
Apparently, it is not uncommon for credit card companies to send pre-approved application forms to minors and the popularity of this trend is growing. Since credit card companies commonly purchase mailing lists from other companies, such as a list of customers and addresses subscribing to a specific magazine, it is possible that a child with a magazine subscription can receive a credit card invitation. After all, after checking the name against a credit report and finding the report to be clean, the child may appear to be an ideal potential customer.
The ironic thing is that credit card companies are actually putting themselves at risk when they engage in this type of practice. After all, if a minor child completes a credit card application without the parent knowing and maxes out the card, the child actually cannot be held responsible for the purchases and neither can the parent. This is because civil statutes state that credit card company cannot enter into a legally binding contract with a juvenile.
Despite the fact that the child cannot be held responsible for charges incurred on a credit card, there is also the concern that a dishonest person might take that child’s information and fraudulently open up a credit card account. Being exposed to this possibility while still a preteen is a scary thought.
So, while I am in favor of parents getting credit cards for their children and helping them learn how to use plastic responsibly, I am also in favor of credit card companies doing a more thorough job of prescreening applicants in order to make sure juveniles are not being faced with an increased chance of being the victim of identity theft before they are even old enough to hold down a job.
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