In our last 4 Ways Bulletin I included an article on teaching our kids about credit cards. Since then I've been quite shocked to learn exactly how hard some banks are pushing credit cards on them.
A few weeks ago our 19 year old Ashlee received a marketing call from one of the 4 major banks where she holds an account. It was a fairly young guy who was extremely friendly, asking her about what she was doing at uni and how she was going etc. He then led the conversation to how she really should have a credit card. First he used scare tactics - did she realise she'd never be able to get a home loan without a credit rating and a credit card would help her with that? But then he went in for the real kill - "haven't you ever seen a pair of shoes you really wanted but couldn't afford..."!!!!!!
Terrific! In one sentence, this guy had tried to undo years of us teaching our kids the value of saving for what they need, any not going into unnecessary debt.
When Ash explained she needed time to think about it, and might look at it in her uni holidays, he told her she shouldn't really wait when she could do it now, and told her he was putting her through to a Financial Planner, presumably to "seal the deal". Again, the chap was very friendly when he started chatting to Ash, but when she explained that she really didn't want to commit on the spot, his attitude changed quickly and he all but hung up on her.
Some facts about Ash:
- She is only 19;
- She is studying Accounting at uni and does not have a full-time job;
- She has just $50 in an account with the bank that called her;
- She does love shoes;
- She did go online afterward and applied for a card herself, but thankfully was declined!
As you'd imagine, finance is a fairly common topic in our household (1 Financial Adviser + 1 Accountant = wild family fun times) so Ash told Mick and I about the whole ordeal over dinner that night and we were able to have a frank discussion about the pros and cons of credit cards. But I shudder to think about how many kids might get into credit card debt before anyone even realises they'd been given the card! Or should I say "sold" the card. Because I'm sorry, but if you dangle shoes in front of most females as the proverbial carrot, that's a hard sell!!!
I'd really like to encourage all parents to have the credit card conversation with your kids before the bank does. To that end, if you didn't catch my article in the 4 Ways Bulletin, just click here as it highlights some important issues everyone should know about the so-called "fantastic plastic".