Back to frontIf it's free, just say no
My teenage daughter signs me up for a "free" weekend trip...a surprise gift, she thinks. When our phone rings to offer the prize, a cheerful voice explains my trip includes a meeting in Tacoma and a longer one in Las Vegas, where my husband and I will stay in a condominium suite, just like one we'll be pressured to buy.
Another time, my daughter signs herself up to receive 10 CDs for a dollar, and later discovers she's obligated to buy 12 others that cost more than retail price. "You should have read the small print," I tell her. But I study the ad and can't find those details.
My teenage son calls TicketMaster and uses my credit card to order Mariners' tickets for the family. Simple task. After securing seats, the voice on the other end offers 13 free issues of Sports Illustrated. My son happily complies. He doesn't hear that after those issues, a year's subscription will be charged to my account.
The kids don't get it, at least mine don't. They don't believe the friendly telephone voice would try to con them, and they don't ask for details. From what I've seen, today's young consumers love anything that's free, and the corporate world has discovered they're easy prey for hidden pay later.
This summer, my son hands over one of many letters offering him a credit card. A manly piece of plastic he can toss on the table to impress the girl he takes out to dinner. So he wants a VISA card, even before he has a steady job. Most of his college friends have credit cards, he says, but doesn't mention how many pay bills with 15-20% interest. Recently I read that over half of all young adults now carry debt from month to month on their charge cards.
Many adults do too, because it's so easy to treat credit like free money. Overspending is epidemic in our culture, and the young in particular are easily infected. Today's kids learn to spend long before they learn to earn. And when they do earn money, they spend more. Some continue this pattern of reckless spending and rampant dept, as self-destructive as any other addiction.
Credit-card companies are aggressively and successfully getting young people hooked on credit. Personal letters tempt students with, "Just write a check to yourself and receive cash… Even if expenses are piling up, getting the cash you need is easy… Shell out some cash for a dream vacation…"
Kids fall for this stuff, and now 70% of students at four-year colleges have at least one credit card, and their debts average more than $2,000. Some critics claim that pushing plastic on campus now poses a greater threat than cigarettes and alcohol. It's as if the Joe Camel billboard has been replaced by a flashing VISA card.
Maybe I shouldn't be surprised, given that my generation has accumulated massive debts. In addition to the national one, America has moved from being the world's largest creditor, to its largest debtor. Not a very good example for the children.
In our family, kids receive an allowance through high school, and then we (parents) pay college tuition, room & board, while they pay for everything else. That means summer jobs and some hours per week on campus, if they want fashion and fun money. My husband and I never imagined credit cards in this picture. We never taught them to Just Say No to easy money and free gifts. We assumed the shiny cards would appear after they graduated and landed jobs with salaries that afforded rent and food and car payments. After they'd learned to manage money and control impulse buying.
But here we are in a culture where greedy companies are aggressively luring kids toward financial Never-Never Land. What can we do? My husband and I gave our teens a crash course in sucker prevention. The main message: Free gifts always come with a hitch. If an offer sounds good, ask about requirements and delayed expenses, and get it in writing. As for credit cards in college, we persuaded our son to get a debit card instead. Now he carries a handy piece of plastic, but it won't deliver cash he doesn't have in the bank, so he can't get in dept. Whew. We hope that choice buys a few safe years and a little more wisdom.