November 30, 2007
Albany - A third of all high school seniors carry a credit card in their wallets. For most, the name on the card is that of a parent and that's who's responsible for the bill. But does plastic teach teens good spending habits or set them up for financial failure?
On average, one out of every three high school seniors carries a credit card. So when we sat down with these seniors from Deerfield Windsor School, we weren't surprised to see this. "Which one of you all has a credit card?" "I do," said Neil Wetherington. He carries this black diamond credit card in his wallet, but the name on the card isn't his. "Starting next year," said Neil, "When the credit card says my name, I have to pay for it."
For now, his parents pay. But that doesn't give him free reign to spend. "Do you ever overspend?" "No, scared too." "Why?" "I've seen my brother get in trouble before and I'm not taking the risk. I've learned my lessons."
None of the other members of this group has credit cards. Hank Goodyear says he doesn't much see the point. If you don't have the money to buy something, you shouldn't. "I don't see much of a need with credit cards," he said, "especially now when you can use a debit account and you can't spend money you don't have."
And although this group of students seems to have taken that lesson to heart, many of their friends haven't. "They go out to lunch everyday and they charge it or they go shopping after school almost everyday," said Lindsay Stern.
And mom and dad foot the bill. "What do you think that teaches them about financial responsibility?" "Nothing," she said. Wetherington added in, "Nothing at all. They just think they can spend as much money as possible and never have to pay it off because their parents pay it off, so they have no concept of what they've done."
And Breyonna Harris, who recently wrote a five page report on the dangers of credit cards, says it's a lesson they'll eventually have to learn the hard way. "It not only affects them at that time, but it affects them way on into life," she said. "When they have kids, want to buy a house, want to buy a car. It affects everything." Putting all of their money, plastic or cash in jeopardy.
Teenagers under 18 can't apply for a credit card without their parent's signature. If you want to teach your kids about spending wisely, a savings account, checking account with a debit card, or pre-loaded credit cards may be a better idea.
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