[donald scott @ Oct 9th 2007 4:02PM]

OR:

(1) don't give them a 'shared' credit card
(2) teach them financial responsibility, don't let them get it from a toy

More than parents, though, retailers like Best Buy, Macy's, Kohls, etc. should be worried about what kids could learn from this. If kids don't have the financial responsibility to control their own spending when they grow up, retail institutions that make large amounts of money by lending to customers won't make shit, cause the customers won't be paying it back.

ds

[brett @ Oct 9th 2007 4:58PM]

actually, retailers are ecstatic when people with less-than-reputable credit scores sign up for their credit cards. they make far more money off of delinquent payments (sometimes upwards of 30% APR) than they do off of responsible clients who pay off their balance in full each month.

and the lenders don't really care about their clients' solvency: they can recoup if their clients file for bankruptcy, and then grant reapprovals the very next day for the same cards they couldn't afford the first time around.

...it's a vicious cycle...

[Paul @ Oct 10th 2007 8:37AM]

Also, the only way people learn financial responsibility is by being given the opportunity to actually be responsible with money.

A child is not going to learn to be responsible with money if he / she never has any money to be responsible with.

[twp3pf2 @ Oct 12th 2007 10:39AM]

Yeah, retailers love it because they aren't the ones taking the hit when the kid goes broke; the credit card company pays the retailer, and then they do the collecting from the kid with the card.

This is why credit card companies target college freshmen; they want someone just naive enough to rack up some debt without a real understanding of how the card works, and they know that the parents will swoop in to try to rescue their child (and maybe the child's credit rating) when the card hits its limit.