Credit Cards for Kids 8-14: You’ve Got to be Kidding

Here’s a crazy story from Newsday.  It cites a survey from T. Rowe Price for Parents, Kids, & Money that indicates the number of children between the ages of 8 and 14 who now carry credit cards quadrupled.  The survey itself suggests that 18% have credit cards.

• Consumer credit card debt has exceeded the peak set during the recent recession, according to a 2017 Parents, Kids & Money survey by T. Rowe Price, and more parents are giving their children credit cards.

• The survey of more than 1,000 people revealed that the number of children ages 8 to 14 with access to credit cards quadrupled in the last five years. The number of 13 and 14-year-olds carrying credit cards more than doubled in the past year alone.

Not sure if the survey confuses credit cards with other card products but something does not make sense.

Here in the Riley household, kids were sent off to college with a checking account and a debit card, which could regularly be funded at our local community bank.  I got to monitor spending through their online account.

…but no one gets to touch my long established high credit line cards, except my wife and me.

I did set up each child with a secondary card that they did not even know about, just to establish a credit record.  Those cards remained in a safe for a four year stint.

• But children can also learn bad habits. “They think: see it equals buy it. A spending spree can happen at any time. With a low credit limit on the card, it can be maxed out in minutes,” says Gregg Murset, CEO of Phoenix-based BusyKid, an allowance app.

This is a business case for prepaid and debit cards, if you’ve ever seen one.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

Read the quoted story here