Teen Credit Card: Simplicity of Trap?
Your 16-year-old has just received a major credit card with his name on it and a $1,000 spending limit. What do you think she would when you drop her off at the mall? would she have the knowledge and awareness to use it wisely?That scenario scares most parents. it's like giving your kid the car keys for the first time while they don't really know how to drive. many teens don't know enouh about how the credit cards really work let alone how to pay for the bill, but the issuer know a lot about them and it's their potential market.
Credit card companies, keep a hawk's eye on demographics, initiating the quest for kids under age 18. one of the reason is that now there are more teens are working full- or part-time jobs and spending their own money -- as well as a little more of mom and dad's thanks to the internet business. A lot of that money is being spent online. Jupiter Communications estimates that teens accounted for $1.2 billion in Internet spending by 2002.
Card companies still have ways of branding their names on young brains. Many schools work with corporations to sponsor events. As a result, the lender might be allowed to hang a banner in the gym or stadium. Most credit card forms stipulate that the applicant must be 18 years old, but just as there is no way to ensure a mischievous minor won't sneak away to puff a cigarette or swig alcohol, there is no guarantee a credit card won't fall into the wrong hands.
