Financial Responsibility

As part of my procrastination, ahem, I mean term paper-writing process, I've been spending a lot of time logged into MSN and Facebook (Jordana, you're to blame!), and watching more than my fair share of trash TV. I've been noticing all the ads while I'm at it too, and one in particular has annoyed me so much it deserves its own blog rant. The ad runs on MuchMusic and MTV and is for a "junior version" of the MasterCard. This training credit card is for kids 13-15 who are too young to get a real credit card and, according to the commercials, too old to run to mom and dad everytime they need cash. The parents load the card with a set amount, so it's really more like a debit card than a credit card.

The whole training credit card concept smacks of marketing ploys gone wrong. I mean, if you do get one of these for your kids, are you teaching them financial responsiblity? Not really. All you're teaching your kids is to spend money before they can even earn it, to spend money that's not theirs and to spend beyond their means. In a society where debt levels have reached record highs for the average North American citizen, it's astonishing that we're teaching kids to spend "imaginary" money by teaching them to use credit cards before they understand the importance of good financial habits like saving and budgeting. And forget the "kids are learning about building up credit history" argument. These cards are prepaid by the parents, so the kids don't bear the financial burden and they're not proving themselves loan-worthy by buying on credit and paying their bills on time. So, what does the training MasterCard accomplish? One, it builds up brand consciousness so that by the time these kids are old enough to get real credit cards, they'll consider graduating to a real MasterCard instead of getting a Visa or an American Express. Two, it passes on unsustainable consumerism habits: when these kids do mature, they will spend beyond their means and charge things to their cards for sure, carrying sky-high debt levels for most of their adult lives.

If parents really wanted to give their kids some degree of financial independence while teaching them responsibility, they should just open a debit/chequing account at their bank of choice and deposit their kids' allowances in their accounts every month. Or better yet, just give the kids their allowances in real cash. Forget the hassle of the training credit card. It's all marketing, it's stupid, and it teaches stupid habits.