Forum Moderators: buckworks
AOL want to introduce 'cash cards' so that young people can spend their money online in addition to withdrawing money from ATMs. The program will be available for AOL members with teens age 13 and up, with parents managing funds and limits.
The article says that "Teens spend an average of $101 a week and accounted for $5 billion in online spending in 2002". Obviously all that disposable income is quite enticing, however the possiblities for fraud with this type of card seem to me to be pretty high.
Would you give your kids a cash card to spend online? And as a merchant, would you want to accept these cards?
With the problems of fraud, etc and the whole issue surrounding encouraging easy spending and debt in youngsters, I think such a scheme is likely to face a lot of problems.
Yeh, if I was a kid I would have loved, but what a shock it would be to suddenly start working an have to pay for this stuff yourself.
A lot of kids would no doubt use the cards wisely, but some would abuse it and that's where the problem lies.
And enough kids get mugged for mobile phones - jeez! Can you imagine how the crime rate would soar with these!
Scott
If they weren't so darn expensive, they'd be awesome. CVS (local pharmacy/convenience store) has them now, but it cost 10 USD to load money on to them. They didn't list any other fees, but I'm sure there are some.
greenatmcard .com has a decent program, especially good if you need to send money to someone out of state/country. You just load money on your card, and it's available almost immediately to the other cardholder. (You get two cards for the 50USD.)
Teens spend an average of $101 a week
...y'ouch!...I used to get £10 a month!...that's some serious spending power in the hands of youngsters!...
</off topic>
I'm not quite sure what you mean. Debit cards are a growing source of both online and offline fraud. Credit cards are more common, and so result in more fraud, but abuse of AOL's proposed system seems to me impossible to avoid.
Of course the debit aspect would help to stop kids running up debts on this sort of card, but this wouldn't change the fact that given one of these cards a 13 year old can spend undersupervised.
>>y'ouch!...I used to get £10 a month!...
I hear ya! Time to start selling chart CDs... ;)
I remember when I was 14 a lot of kids would sign up for columbia house and get the free cds. Then they wouldn't pay for it. The company couldn't come after the kid. If you don't think 13, 14, and 15 year olds are smart enough to scam merchants with this, then you should talk to a 14 year old. They are young enough to be protected by laws but old enough to come up with elaborate schemes.
Pre paid mobiles is pretty much the same thing on a smaller scope and there have been many instances of kids running up huge bills (read: spending all their available credit and then buying more).
Debit and credit are parts of financial freedom that we learn how to use sensibly when maintaining our own budgets. A lot of children do not have the knowledge or understanding to use debit cards sensibly.
Even with careful parental supervision, I dont think it is appropriate for a multinational to offer financial services to children.
Given their history and indepth use of consumer information, this is only leading to targeting a new generation of consumers when they are at a very young and impressionable age.
You want your child to have financial freedom? Fine - many banks offer great under 18 accounts.
You want your child to have all of their spending habits kept on file and analysed by one of the largest and notorious mass marketers in the world? May as well send them to AOL High School.
And that's aside from the potential financial problems, the potential fraud issues and the potential crimes (like I said - enough teenagers get mugged for their mobile - a debit card will be similarly attractive to a mugger).
Scott
We buy their clothes and meals, pay for their one cellphone (kept in car for emergencies) and give them a rare 10 bucks for a movie.
Marketing fantasy to think there are many teens with a discretionary $101 a week to blow. Remember that is AOL talking!
By the way, my eldest son does have a full blown credit card that he uses almost exclusively to buy gas. And he's not likely to do that onllne!
I can't see anything but the most blatant greed in the eyes of AOL in wanting to do this. Yes, encourage already irresponsible parents to take even less responsibility for their children. Get the kids hooked on spending when they're young so by the time they get to college they'll be perfect suckers for all those free credit card booths handing out t-shirts and $10000 credit lines to get them hooked on debt. I got so many credit card offers at my student mailbox that it wasn't even funny. I had to go check my mail every other day just so I could clean out the box so real mail could arrive. You'd walk into the student center and the floor would be carpeted with Visa envelopes that students had simply pulled out of their mailboxes and thrown on the floor in disgust, and you'd know there'd be two waiting in your box for you.
So, targeting kids with credit cards isn't new; that's how they make most of their money, from stupid youngsters spending money they don't even understand. It's just new to aim it at very young kids with their parents' theoretical blessing.
(insert rant) True, except that banks play little role in teaching "financial freedom" habits anymore.
Banks did promote small savings accounts when I was a kid. My grandparents opened accounts for me and gave me piggybanks to put my change in.
The business of banking has shifted almost entirely from helping people save to teaching them to borrow...and for ridiculous reasons...to buy a boat, a vacation, the umpteenth kitchen remodeling.
I opened my own stock brokerage account when I was 19. By the late 90s, online brokers had become the casinos for the masses. I don't think I'd trust my kids around a stock broker these days.
Aye that's a good point! :@)
Banks or AOL?
Hmm lesser of 2 evils?
Banks do operate in such a way as to encourage "lifetime custom". And they do conduct a lot of mass marketing (VISA junk in your student mail box being the tip of the iceberg no doubt! ;))
But for some reason I just trust financial institutions more than I trust AOL....
Maybe it's the idea that they are more heavily regulated by the government than companies are (although in reality, any organisation dealing with finance probably faces the same legislation)?
I just think the level of information that AOL would accumulate through this and what they would do with would not be for the benefit of children targetted.
Businesses have targetted products at kids for years, but catching them when they're young and accumulating detailed information on their spending habits is just taking it a bit far. It just seems kinda....sinister.
Would any of you have liked to have spent the past 10 or 20 years of your life being analysed by a corporation and directly targetted (and not piss poor demographic segmentation - YOU specifically being targetted)? I dunno - that just creeps me out. I wouldnt want my children to go through that.
Keep in mind that AOL will have info on the kids spending habits, surfing habits, contact details, A/S/L, parents details (occupation? salary?), PC spec?, etc
They will know what they are doing, what they are buying, how often they buy it, where they buy it, where they go, what their interests are, where they live, how much disposable income they have (or their parents have), what age they are.....
With that info it is fairly straight forward for a company with the resources of AOL to diversify their business in line with the trends of younger users and target them individually.
Wow this turned into a rant! Sorry bout that! ;)
Scott
When I was Teen in the 80's I only around $10 a month my kids get maybe $25 per month so where in gods name did they get the figure of $100 +.
Maybe but having seen so many 0% offers on finance I instantly distrust large firms.
A little debit card that he would be entirely responsible for would go a long way in teaching him the value of money.
Right now he thinks credit cards are fabulous plastic wonders full of limitless bounty that you never have to worry about paying off.
Spending a quick $100 on stupid junk and then realizing he needs to work to put more $$ in the account would teach him an excellent lesson.
You dont need to let kids play with fireworks to teach them that they are dangerous. Plus why should AOL profit from parents teaching their children? Or rather, why should they take over the role?
Social responsibility and education is a whole other topic in itself though! ;)
Scott
"But for some reason I just trust financial institutions more than I trust AOL...."
Can you imagine the financial trouble we'd be in if Kenneth Lay and his "innovative" kind were running banks in the 90s? We'd be in the same trouble we were in during the 1930s: stocks crashing, jobs disappearing AND saving accounts wiped out! Very scary stuff because it was entirely possible. Lord knows how Fed deposit insurance(which didn't exist in '29) would have worked under that scenario.
BUT we had just pulled thru the Savings and Loan meltdown of the 1980s. Banks were still heavily regulated and audited by real auditors (not golfing buddies of the CEO).
You can trust banks only in the same sense that Imclone is trustworthy... this month!
