Trust Kids to Make Online Purchases
Tweens and minor teenagers are sophisticated consumers. They should be allowed to have credit cards of their own or use prepaid vouchers to buy e-tail merchandise. Pro or con?
Pro: A Good Lesson
An important part of my financial education as a youth came from having to earn my own money and in turn, being able to spend those funds on things I desired, such as music, arcade games, food, and movies. I strongly believe that tweens and teens today should have that same freedom to spend and learn.
The problem now, however, is that a significant portion of what teens want to purchase doesn’t exist at the local store. Modern teens purchase MP3s, play and chat online with friends, and watch the latest TV and movies on YouTube (GOOG) and Hulu. Teens have vibrant online lives. Spending at appropriate websites is as important today as buying music at the record store was in my youth. When used correctly, debit and prepaid cards play key roles in providing online access and financial education for today’s tweens and teens.
One of the prime components of these financial instruments is that unlike credit cards, they give access to a limited pool of funds, which helps youth learn that when the last buck is spent … it’s gone. Youth debit cards can easily be set up with appropriate spending limits. Cards and vouchers are value-limited and are also well understood, with 85 percent of teens having purchased gift cards, according to a 2007 study by Comdata, a company that specializes in electronic payment solutions.
A vast majority of parents trust their kids to use cash wisely for local purchases, so let teens have this same freedom online, where their connected lives are unfolding.
Con: The Wrong Teachings
As a mom of five children in the prime online-buying age (7 to 17 years), I’m all in favor of kids’ using the Internet in supervised settings. Two weeks ago my sister-in-law turned me on to a fantastic programming language for kids, Scratch.mit.edu, which is teaching and entertaining my younger children.
I don’t view on-the-spot, prepaid online purchasing by kids as a learning experience or as a way for them to appreciate the value of money. I see online credit cards and prepaid purchase cards for kids as just the opposite—another manifestation of the "I need it now, it’s just one click, and it’s fake money anyway" culture. As more and more video games and online gaming sites feature purchases paid for not in chips and points, but in old-fashioned U.S. greenbacks, kids can grow less and less aware of the concrete (and finite) nature of disposable income.
The last thing I want my child to do is click to buy tchotchkes online with Mom and Dad’s money, under the caption: "This will teach them what things are worth." I’m not buying that. The fact is, another weapon for your imaginary video game hero isn’t really worth anything, but a smart game designer and e-commerce professional working together have temporarily persuaded you that it is.
My answer is to shut off the PC and give the child a rake or a broom. There are plenty of three-dimensional opportunities to offer kids lessons about the value of money. By some good fortune, the universe grants me at least one of those a day.