Kids and Credit Cards - The Conversation Continues
Last week I posted about kids and credit cards and asked Who is to blame? This was in response to a comment left on my post about a reader’s 12 year old daughter getting credit card offers where I was taken to task for blaming the banks and credit card companies for my (our) mistakes. That’s what I love about blogging with open comments: y’all can make me think and rethink things. (Just remember the comment policy is still in effect.)
The other beautiful part of blogging is other bloggers can join in, and some have:
- CleverDude wrote a massive post on how he thinks it is first the parents’ responsibility to educate their children, then once the child has reached adulthood it then becomes strictly personal responsibility.
- LJ from Mommy Gets Paid thinks the credit card companies know exactly what they are doing when they raise the college kids’ limits to ridiculous levels. They did it to her, and her parents helped her out. (Mine didn’t.)
- Ryan from Millionaire Money Habits says college kids are just too impulsive and truly need a plan before they ever step foot on campus. While I may not completely agree with his plan, it’s still better than no plan at all.
- CindyS from Oh My Aching Debts supports personal finance classes in the schools, since her parents didn’t teach her about money. Judging from the economic news nowadays, I’d say a lot of adults in America didn’t get financial education from their parents.
Perhaps the best response to the question I posed can’t be linked to. Lara92 from MyTMMO board says there is enough “blame” to go around and touch all parties involved.
- It starts at home. Parents should include things like budgeting, paying bills, and managing reasonable levels of credit on the list of “must teach” to their children. I don’t think any parents simply hands a teenager the keys to the family car and says, “Go figure it out on your own,” so why do we do this with money?
- Once a person is an adult, they have the responsibility to keep learning and discovering better ways (or the tried-and-true ways) of how to manage their personal finances. No one will look after YOU better than YOU.
- The banks and credit card companies are not blameless here. They intentionally target college kids, and some have engaged in kiddie branding tactics. They intentionally write their terms for credit cards in legal double-speak, so badly that Professor Elizabeth Warren of Harvard Law School said (in the excellent Frontline special about credit cards, part 3) a graduate level contract law class of hers could not agree on what a credit card companies “disclosure” actually said. They often use dirty tricks to hit you with fees and can change the terms at any time.
- Schools should teach at least a basic personal finance class. We teach kids everything else in school, why is this neglected? Perhaps the most comprehensive suggestion I came across recently was proposed by a college student in a guest post at Blueprint for Financial Prosperity. I’m not sure that plan will fly, but even just a budgeting and how to deal with credit class would go a long way for future generations.
This post probably doesn’t clear much up for anyone LOL It doesn’t for me. This is a massive problem, especially here in America right now. We have at least three generations of adults who seem to have problems managing their personal finances! (That’s a generalization, I know there are quite a few individuals who can.)
With so many different factors involved in identifying the cause of the problem, how are we going to figure out and agree on a solution?