kids and credit

Isobel - posted on 03/02/2010 ( 13 moms have responded )

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my kids went on a "community walk" the other day with their class, and returned home with copies of VISA cards with the Olympic theme on them...I know a lot of people will feel that I over reacted but...I threw them in the garbage...with children looking on.



I am a business student (majoring in marketing) and in the best of times marketing is supposed to be about two parties with unsatisfied needs meeting and trading...however...I am also able to pick apart marketing strategies, who they are targeting, and what their ultimate goals are.



giving toy credit cards to children is like giving them toy drugs...or toy alcohol. We wouldn't allow that in our house...why on earth are my childrens' friends parents allowing these credit cards?



...or do you think that allowing them to play with credit cards will teach fiscal responsibility?

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Lea - posted on 03/04/2010

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No! Credit cards are NOT TOYS!!! If the grow up thinking that, that are in for big trouble.

Isobel - posted on 03/04/2010

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AAAARRRRRGGGGHHHH!

Kwedit Launches 'Play Now, Pay Later' Payments

Kwedit Inc. has partnered with retailers and publishers to launch Kwedit Promise and Kwedit Direct, two alternative payment systems allowing consumers to receive virtual goods in exchange for promises to "play now, pay later."

With Kwedit Promise, consumers without credit cards can still obtain virtual goods immediately by making a Promise to pay for it later. Players can make Promises up to a Kwedit Limit, a spending limit established by publishers and the user's Kwedit Score (determined by previous and timely payoffs of Promises, similar to real-world FICO scores).

Kwedit Direct allows players to pay off Promises by making Kwedit Slip payments at participating stores (including 5,800 7-11 stores across the U.S.), send a cash Kwedit Mailer payment, or asking a friend or family to member to pay on their behalf through a social payment network called Pass the Duck (Kwedit uses a duck as a mascot and theme for its service).

Kwedit Slip payments use a barcode that gamers can print out and retailers can scan at the register. The Pass the Duck network allows players's friends/family pay with a Kwedit Slip, Kwedit Mailer, credit card, and debit card. They can even Pass the Duck to someone else.

The company says that failing to make payments or having a low Kwedit Score will not have any real-world implications, and as a result, its service provides "a safe environment in which consumers can learn about and develop financial literacy." It also notes that parents can monitor their children's spending through the Pass the Duck network.

Kwedit is currently available through over 100 online games and other destinations such as FooPets and PuzzlePirates thanks to partnerships the startup has made with publishers and payment aggregators. It plans to add more publishers to its list of partners in the coming months, too. Kwedit Direct is also a featured payment methord through virtual economy platform Social Gold.

"Most teenagers and the 25 percent of American households that do not have a credit or debit card - or who would prefer not to use them online because of concerns over privacy, security, or financial responsibility - have been locked out of the exploding virtual goods markets," says Kwedit CEO Danny Shader. "With Kwedit, those consumers can safely participate in the digital content revolution, growing the market for publishers and retailers such as 7-Eleven."

Sarah - posted on 03/04/2010

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I don't have a credit card any more.
I had one when i was 18, maxed it out, couldn't pay it back and it was a NIGHTMARE!!!
Luckily for me, my brother in law paid it for me and i paid him back interest free!
I would never get another one, purely because i couldn't trust myself with it.

I do use my debit card for most things, very rarely have cash on me. I have a £50 overdraft limit, and that's it. In saying that, i have another account that is £850 overdrawn (again from when i was 18) that i'm STILL trying to pay off! I'm crap with money! lol :)

Jodi - posted on 03/03/2010

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Yes, that's also why I have only a VISA debit card. I hate credit. Laura, I was the same as you. I ended up financially better off once I was divorced because my ex used to spend money we didn't have ALL the time. He evidently still does, because he still doesn't have two cents to rub together, and he can't pay his child support!!!

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Krista, you can use VISA debit cards for those sorts of things. And they are as secure as credit cards (read the VISA debit fine print). Just a little FYI =)

Charlie - posted on 03/03/2010

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Sharon i have a debit card too with the master card symbol on it , i use it like a credit card but only using my own money in the bank .

I think credit cards are dangerous but i think debit cards are EXCELLENT !!
So far my child uses them to throw or chew when he hijacks my purse .

Isobel - posted on 03/03/2010

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I cut all mine up when I left my husband...when I was with him, every payday our money was gone before the cheque was even cashed. everything was bought on credit and we never had two pennies to rub together. When I left him (and cut up all my credit cards) I actually ended up having MORE money as a single mom.

Krista - posted on 03/03/2010

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I have one credit card. One. And the only reason for it is that sometimes I buy stuff online, or we book hotels when we go away somewhere, and a credit card is pretty much mandatory for that stuff. But I keep the credit limit down to the smallest one Visa will give me, because I know that if I had more available, I'd piss it away on $30 here, $50 there....

So my kids definitely won't have toy credit cards, and I'll definitely be talking to them about money and how to recognize their own triggers and weaknesses, and to make sure they're not setting themselves up for bad credit down the road.

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Credit cards are the DEVIL!!! Maybe I'm being very overly dramatic (okay, I know I am) but they are not good for anything. Some people say the are for "emergencies." Why not build up an "emergency fund" in the bank to use for emergencies instead of putting it on a credit card with 28% interest that you will still be paying back 10 years from now?

Okay. Rant over. Laura, I agree that it is wrong to give children toy credit cards. VISA is obviously trying to market their brand to these kids, so that when they are old enough for a card, they will associate VISA with the fun they had with the toy as a kid. I do not think that credit cards teach fiscal responsibility. I think they teach, "get it now and not worry about paying." When in reality you will be paying for the purchase on VISA for years to come.

We recently cut up all credit cards and use the "envelope system." We have 3 envelopes for "groceries" "restaurants" and "blow money". We put a specific amount of cash in each envelope at the beginning of the month. When the money runs out, too bad. We have to wait until the next payday to fill the envelope back up. I don't run around town with hundreds of dollars. If I go to the mall, I leave the "grocery" envelop at home as I won't be needing it. I will take the "blow" envelop and maybe a $10 out of the "restaurant" envelope to spend at the food court.

This system has worked wonders in our budget! No more "accidental" overspending. We think about each purchase because we know if we spend too much, we will be in a tight spot until the next payday.

I've heard of a study that found spending cash registers as pain in the brain. It hurts to see your cash dwindle away, while most people rarely think twice about swiping a card!

So in short, I think you were wise to throw away the toy cards. I would take the time to explain why. Use it as a teachable moment. But I wouldn't let my daughter have a toy credit card either.

Sharon - posted on 03/03/2010

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ouch... well technically I use a credit card for every purchase.



I use my debit card for everyday stuff. I told the kids "its like cash. instead of me carrying $40 and spending $38 and having $2 floating in my purse to get lost or spent spur of the moment on a candy machine - the $2 is still in my bank."



The lesson went deeper than that. Its been an ongoing lesson since the first kid said "if you don't have any money just use your creditcard!"



They know now, that all my money is in the bank and its safe there. If I lose my card, no one can use my money (Not entirely true but close enough).



I figured I'd better come back and add - my debit card is a credit card, I can charge money or instant debit it from my bank account. I don't know about other countries but here in the US most debit cards have a visa or Mastercard symbol on them even if you can't use them to charge stuff.

Jodi - posted on 03/02/2010

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Laura, I am in agreement with you. That is one of the reasons Taylah has an old fashioned toy cash register that I picked up second hand rather than the more modern ones you buy now in the stores, with the credit cards and the swiping mechanisms.



Also, my son, now that he is 12, qualifies for a debit card on his bank account, and I haven't even allowed that yet. I don't see any reason why, at his age, he needs it.



I don't have ANY credit cards (only VISA debit cards, which use my own money, I got rid of the credit cards when we decided to have Taylah and for me to stay home). So I certainly don't want my kids having them!!!

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