TEXT OF INTERVIEW
Tess Vigeland: All parents want their kids to learn the value of a hard-earned dollar. But today debit cards and credit cards are the main ways we buy. And how do you teach the value of a hard-earned rectangle of plastic?
Personal finance writer Beth Kobliner knows all too well how much trouble young people can get into with credit cards. She’s literally written books about it. But beyond that, she has a teenage daughter, Becca. Becca lives in a world where a single swipe gets her friends whatever they want. We asked them to tell us how they find a middle ground between mom’s old school rules and today’s teen pressures.
Beth Kobliner: Last spring, I spent a couple of weeks on a book tour visiting college campuses talking to students and recent grads about the abysmal financial mess they were about to enter. Now, I know the statistics; it’s my job, after all. So I’m aware that the average college senior leaves school with more than $4,000 in credit card debt. And of course, many have much more than that. But seeing it on the front lines like that was a harsh reality check — a new toxic twist on what it means to be a grown up.
Becca Kobliner: When we were little, my brother Adam and I imagined our grown-up futures with credit cards. One swipe and you’re transported, like “The Lion, The Witch and The Wardrobe,” to an exciting world of new stuff. Only, it’s the “Visa, the AMEX and the MasterCard.” The idea of having a credit card still symbolizes for so many teens a sense of maturity and responsibility.
Beth: Back in the late ’80s, when I graduated from college, no one thought you could just swipe your way to the good life with credit. It wasn’t until I had a job and earned money that I even thought about getting a card. It allowed me to buy big, unsexy items without lugging around a lot of cash in my purse. So I’d use it to purchase a desk lamp or a toaster oven for my kitchen, I paid the bill in full a few days after I got it in the mail. I honestly never thought about only paying the minimums and carrying a balance from month to month. Neither did most of my friends.
Becca: I’ve been with friends in the mall in New Jersey, who got to us their credit cards. Their parents will tell them they have a spending limit, but it’s not like kids ever stand around in the store, adding up all their purchases with a pencil and paper. What happens is, they’ll say something like, “My mom gave me this card for emergencies, but this is kind of an emergency. I really want this and it’s on sale now.”
Beth: I tend to quiz my daughter’s friends about their financial lives with the same intensity that some parents use to glean details about the social lives of their kids’ friends. My favorite was the girl from seventh grade who memorized her mom’s credit card number and used it to rack up over $100 in charges on iTunes. When her mother later found out about the spending, she was not pleased. But the girl, a top honors student, tells the story with a chuckle, which makes me worry that it’s a little bit like a kid sneaking a beer. It may make people laugh at first, but when you think about it, it’s not funny.
Becca: I’ll be in ninth grade next year, and as far as I know, credit cards aren’t on the curriculum. I mean, if you can take advance physics and bio chemistry in high school, then there has to be some way to make sure kids can learn how interest works. Like, if you buy a sweater on credit, but just pay the minimum, you could wind up spending twice as much for that sweater in the long run. I hear my mother say that line all the time, which has its own drawbacks. But what about the other kids who don’t have a clue?
Beth: I’m happy college is still four years away. And even happier that, because of the CARD Act, Becca wont’ be able to get a credit card without getting my husband and my permission once she leaves home. Call it my financial separation anxiety. My fear of severing the fiscal umbilical cord that once bound us. At least with the new rules, she won’t be seduced into signing up for a card, simply because they gave her a frisbee or a t-shirt.
Becca: I would never sign up for anything for a free frisbee, mom. You know that. And though I know I’m not going to get a credit card for many years, there is something I would like.
Becca: Can I have a Facebook account?
Becca: Oh c’mon, mom!
Becca: Figured it was worth a try.
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