The topic of kids and credit cards remains a controversial one. I recently read an article that was really down on the idea of supplying kids with credit cards. While I certainly agree with the arguments the author presented, I still feel that credit cards and kids can be a good mix.
The author of the article that I read argued that credit card companies are targeting younger audiences simply to build a new customer base. After all, it is well-known in the world of marketing that you have a greater chance of getting and retaining a customer if you grab him or her at a young age. This is why you see so many fast food chains and other companies catering to children. If they can instill that brand recognition and loyalty into the youngster at a young age, they will likely have a customer for life.
I agree whole-heartedly that the credit card companies are not offering these cards out of the goodness of their hearts or because they care so much for the future of our youth. Obviously, it is yet another marketing gimmick to help win over new customers. Nonetheless, I believe that credit cards for youngsters can be a good idea when implemented properly.
One card in particular that was explored in the article I read was the PAYjr. With this card, parents can set up an allowance system that allows them to pay their children through the credit card. The article complained that youngsters are being trained to look at credit card statements and to look for the minimum balance due when they are supplied with statements showing how much money they are owed for their chores. I agree – the credit card companies are certainly training children to read these statements. What is wrong with that?
We are undeniably entering an age where paying with cash is nearly obsolete. More and more people are relying on paying with their credit cards for both security and convenience. So, what is wrong with teaching children how to read their credit card statements? Keeping them ignorant certainly isn’t going to help when it comes to managing their finances when they get older.
Obviously, no one wants to see a youngster buried in debt. With one of these types of credit cards, however, a parent can sit down and explain credit card usage with his or her child. Even better, the child can actually use the credit card and gain an understanding of how to use one responsibly.
Personally, the only problem I have with these cards are the fees. I would consider getting one for my own children if not for the set up fees and monthly fees associated with the cards that make them an unattractive option.
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