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A Six-Year-Old with a Credit Card
Wednesday, 18th June 2008 (by J.D.)This article is about Credit Cards, Funny Money
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I hate junk mail.
As a test once, I signed up for a subscription to Entertainment Weekly using the name of our cat, Simon. Sure enough, Simon started to receive his very own junk mail — not that he could read it. When we moved in 2004, Simon stopped receiving mail.
Simon never received any credit card offers, but I suspect that’s just because we never gave it enough time. CBS 2 Chicago has a story of a five-year-old who applied for a credit card — and got it.
An Aurora mom was somewhat amused last April when she received a credit card application addressed to her then-5-year-old son. As a test she had young Bennett Christiansen fill out the application and she sent it in. She was stunned when Bank of America sent her kid a shiny new card with a $600 limit.
Bennett even put his real birthday (in 2002) and income ($0), but still was approved. If Bank of America will give a six-year-old a credit card, then surely they’ll give one to my cat, right? After all, Simon has wants needs: tuna, tuna, and more tuna.
Though this story is amusing, it demonstrates how lax banks can be when issuing credit cards. They don’t have the consumer’s best interest at heart. Their goal is to snag as many customers as possible because they know a large portion of them will carry balances and pay monthly finance charges. It’s a numbers game. The more people they can get to sign up, the more debtors they’ll have as an income source. They don’t even care if the people are real:
Remember that you can use services like OptOutPrescreen.com and GreenDimes to eliminate unsolicited credit card offers. This keeps you (or your five-year-old — or your cat) from temptation and reduces the chance of identity theft.
[CBS 2 Chicago: Mom shocked when 6-year-old gets credit card, via The Consumerist and Matildaben]
44 Responses to “A Six-Year-Old with a Credit Card”
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June 18th, 2008 at 1:28 pm
Also realize how hard it is now to get out of credit card debt by declaring bankruptcy. So of course they are more than happy to hand out credit cards like candy.
I’m not saying that people should be able to just bail on consumer debt, but personal responsibility should certainly be balanced with some degree of corporate responsibility in lending. This problem extends far beyond just credit cards.
June 18th, 2008 at 1:30 pm
Approving minors for credit cards is more common than you’d think.
When I was 17, I worked for Zellers (which is sort of like a Canadian Wal-Mart). They have a store credit card, and also a customer loyalty card.
When I was filling out the paper work on being hired for the job, I ticked off a box saying I wanted a Zellers Card. I thought I was signing up for a points card, but I had obviously read it wrong because a few weeks later I got an Zellers credit card in the mail. As I was under 18 at the time, I should never have been approved for that card.
June 18th, 2008 at 1:42 pm
Thanks so much for posting the link to opt out of offers! I get so tired of the junk mail and I never knew there was a way to stop it!
June 18th, 2008 at 1:47 pm
Huh, interesting! Many states have laws that allow kids to enforce contracts against adults but not the other way around. Corporations count as adults. So, theoretically — and depending of course on the specific state’s laws — the 5-year-old could charge up to the full balance and the bank (nor the vendor) could not go after the child or the child’s parents (as long as the parents’ don’t put the child up to it or afterwards accept responsibility for it). Obviously no vendors in their right minds would accept a credit card in the child’s name only without the parents around — but on the internet … ; ) I’m not suggesting anything, folks! Just thinking out loud. Thanks for the interesting story, J.D.!
June 18th, 2008 at 1:48 pm
Not that he could read it
I think you’re being a little harsh on Simon, he may have enjoyed the pictures.
The story about the kid is ridiculous. I remember when I moved the States a few years ago, I was worried about establishing a credit history and getting a card … I didn’t need to worry too much, and it’s clear why.
June 18th, 2008 at 1:53 pm
As all banks — and college students — know, no young is too young to start adding KD’s to your credit report, which lead to higher interest rates (aka bank profits) later in life.
They must have realized that little Bennett will do anything to get that PS3 he wants so badly.
(Snark aside… isn’t it illegal to grant credit to a minor without parent signoff?)
June 18th, 2008 at 1:54 pm
wow.. just wow!
June 18th, 2008 at 1:56 pm
Credit card companies WILL give a card to anyone. This reminds me of the post at cockeyed.com where Rob Cockerman tore up a credit card app and then taped it back together and submitted it. Not only that, he threw a few more curve balls at them that should have TOTALLY disqualified him from getting a card and they sent him one anyway. If you haven’t seen it, it’s very much worth reading:
http://www.cockeyed.com/citizen/creditcard/application.shtml
June 18th, 2008 at 2:09 pm
I did find it funny that CBS2 said the mother will be contacting Bank of America about this matter. Apparently notifying the media took first priority?
June 18th, 2008 at 2:15 pm
Bennett is lucky his mom chose not to use the card. Kids growing up to find their credit records trashed is becoming more and more common.
June 18th, 2008 at 2:49 pm
Exhibit One as to why credit cards are evil and rewards programs are akin to drug dealers offering “first high for free.”
I have credit cards by the way, but I never forget how and why they are there.
June 18th, 2008 at 3:36 pm
Having worked in the industry for nearly six years I can attest to the fact that not all credit card applications are scrutinized for credit worthiness. In fact, many aren’t even scrutinized to determine if the applicant is human, over 18, or has a pulse. Sad, but true.
Thanks for sharing that opt out link. I signed up the last time you posted it here a couple months ago and my junk mail offers have been greatly reduced!
June 18th, 2008 at 4:14 pm
The banks gave a 19-year-old (me) credit cards with limits of $7500, $6000 and $3000 and an income of about $12k/year. I went BK on them in 1994.
14 years later and my financial habits are only mildly improved. ug.
June 18th, 2008 at 4:23 pm
I remember hearing a few stories about people who commit fraud using the information of minors. Heck, CC companies don’t care, and parents don’t usually keep an eye on their minor children’s credit reports to catch fraudulent accounts.
Hmm. Something to add to my “todo” list . . .
June 18th, 2008 at 4:34 pm
Long time reader first time poster. I thought I’d take a minute to speak up on this topic as I have worked for one of the major credit card companies for over 8 years.
I’d like to clarify a couple points. First, it is fairly common to receive solicitations in the name of both children and pets. The most common reason is, as mentioned, magazines. There are tons of parents who subscribe to Highlights magazines in the name of their kids. It makes the kid feel important to get their own piece of mail. Same goes for pets.
Secondly, it is extremely rare that a child is approved for the card although it does happen. Most of the application systems out there automatically decline applications if the DOB doesn’t meet the 18 year old criteria. The majority of the “child cards” I’ve seen had all the correct information with the exception of date of birth.
And while this may seem like a pro- credit card post I’d also like to say that I personally don’t like credit cards and don’t own any. Just wanted to give my two cents.
Worker bee
June 18th, 2008 at 5:18 pm
This amuses me. When I turned 18, no one would give me a credit card because of my lack of credit history (clearly, being that I was 18…). But a 6 year old? No problem! HAH.
June 18th, 2008 at 5:24 pm
If you don’t like credit cards why are you directly supporting them by working for one of the major credit card companies for almost a decade now?
June 18th, 2008 at 5:33 pm
I started when I was 18. I earn enough to support my family, I enjoy the people that I work with, etc.
I personally don’t like them, but I don’t believe they are naturally bad. I have seen many examples where credit cards have been helpful to people. Even life saving.
Additionally, in these economic times I don’t think Willy nilly switching jobs is a great idea.
If I worked at the zoo and didn’t really like elephants should I quit? No I might like monkeys or camels.
We offer home loans, checking and savings accounts, CD’s, money market, etc. And in my quest to save getting employee rates is kind of nice.
June 18th, 2008 at 5:45 pm
that’s awesome. i would get the kid the card, it’s never too early to start building your credit rating.
June 18th, 2008 at 6:09 pm
How old does a cat have to be to qualify as an adult? Do 21 cat months = 21 human years?
The kid story takes the cake. Is it a federal law or regulation that says a person who’s not of age can’t enter into a contract, or does that vary state by state? If the latter, then presumably the age of majority would depend on the state. You’d think that if a company gave a credit card to a 17-year-old, he wouldn’t be responsible for whatever he charged up before he was 18, since the contract wouldn’t be valid. That might be true even after he was 18, since the contract would never have been valid–turning one year older doesn’t magically validate an invalid agreement.
June 18th, 2008 at 6:45 pm
I think we are all missing the bigger picture here. We should all open a credit card for our children as soon as possible. This way when they become adults they will already have an established credit history of 15 years or so. Might help them out early on in life….Just a though
June 18th, 2008 at 9:16 pm
Another site for stopping junk mail and managing catalogs is http://www.proquo.com.
June 18th, 2008 at 9:18 pm
I disagree with Aszeroth. In my humble opinion, a credit card is a powerful financial tool only to be utilized by someone with a mature thought process. A 6 or 7 year old kid is far from being able to distinguish coherent reasoning behind using it as responsibly necessary.
June 18th, 2008 at 10:29 pm
@Moose:
I understand your point of view. I would not have actually given the kid the card, just had it opened. However, I do think there is cause to be concerned with something like this. Situations like this just show how easy it is for anyone to get a credit card and how easy identity theft really is.
June 19th, 2008 at 12:44 am
Aszeroth touches on what I see as the larger issue here.
With Identify Theft in play as a reality these days, and so many places/companies/governments not acting responsibly with private data, shouldn’t the real concern of this story be that, the lender did not take the time to properly validate the identity of the requestor before granting the credit line? Are the lenders penalized for not doing due diligence? Sadly no, they are not in any way penalized that I can see. I think until the front end of granting credit and the back end of credit reporting/identify verification are linked in some way, Identiy Theft will continue to increase as a social problem without end in sight.
June 19th, 2008 at 7:22 am
My brother, at the ripe age of 8, received no only credit card offers, but also very persistent recruitment opportunities from the military! Go figure…
June 19th, 2008 at 8:02 am
I got sent a pre-approved credit card in the mail when i was about 12 but when i sent the thing back to them with my real age and income they decided they didn’t want to give one to me after all
June 19th, 2008 at 9:33 am
I was shocked when I worked at Claire’s Boutique (costume jewelry for girls/teens), and a VERY young lady handed me a Platinum credit card with air miles. Per store policy, I asked for ID, and she handed me her JUNIOR HIGH school ID. I couldn’t believe it. But because it was her card, I proceeded with the transaction. Wealthy Chicago suburban parents must not have minded the extra air miles their pre-teen daughter was racking up for them….
June 19th, 2008 at 9:39 am
@Funny about Money - you are right, it does vary by state. The general rule is that the newly adult person that had previously entered into contracts as a minor has a set window of time to go back on their word with their newly found adult wisdom. I think it is a year, but that might vary by state too. (I am not an attorney.) It is a risk that most retail stores take, an option they like more than refusing sales to minors, the people who have no real bills to pay and their parents’ money to spend, and all the time in the world to shop until they drop.
The real risk is with things like car sales, apartment contracts, and the like. Those salespeople are a lot more concerned about ages when it comes to contracts. That is usually solved with a co-signer.
June 19th, 2008 at 9:44 am
What I think is really low is the banks that target the people just coming out of bankruptcy or financial crisis for credit cards with 22% interest rates, and high fees. That is not ethical if you ask me, but I think they played it off as “equal opportunity” for bad debtors and good debtors alike… because we all know that credit cards are our “right”. Ha.
What happened to responsibility?
June 19th, 2008 at 10:29 am
Is it ever too early to start a credit history?
June 19th, 2008 at 11:32 am
On the contract rescission issue, a brand new adult can, at common law, rescind contracts made as a minor. But that usually entails trying to put each side back to the state they were before the contract. For example, a kid who bought a car who then rescinds the sale contract might have to give the car back and pay any difference between the original value and current value plus payments to date. These scenarios can get very complicated very quickly.
States vary, this is just the basic common-law practice.
June 19th, 2008 at 12:35 pm
Umm, doesn’t one need a SSN to apply for a credit card, or is/can that just be overlooked?
June 19th, 2008 at 1:32 pm
okay, the contrarian has to point out to all those advocating starting your kids credit history early…
ya’ll remember something somewhere about not being able to buy or sell without a number in one’s hand or one’s forehead?
how many of you (me included) know a card number by heart and can type it into an online order form without looking?
Why again should we start our kids early? Because we cannot buy or sell without cards…or very nearly. (read: not having a credit history–or a poor one–includes one in the disenfranchised human group like illegal aliens, indigent and uneducated persons and otherwise considered of no-account by the vast majority of our society BECAUSE they have “no account.”)
Even a debit card is a “card”…
(also near to the point…how many people should have bounced a debit transaction and suddenly found themselves the proud owner of several thousand dollars worth of unasked-for overdraft protection? At a low 8% clip of course.)
Even if the old tales hold no water for you personally, there’s still something incredibly dangerous and de-humanizing about this kind of thinking if we would but realize it.
June 19th, 2008 at 4:24 pm
WHen I was in college my Roomate signed up my cat for a credit card, and she was approved!! My roomate then took the card to Europe and maxed it out (about $500-$600 I think). Now my cat has terrible credit because the bills were never paid.
THis is a totally true story! I have been sharing this story for years and thoguht it was funny to see this post on this site. This was also like 8 years ago. Credit card companies don’t care about who gets their cards.
June 19th, 2008 at 9:11 pm
I finally got myself completely free of all Credit cards, but I kept getting the offers. So for the past 6 months I have sent back the Credit cards Pre-paid envelopes with as much paper that came with the offer and the statement No, I don’t want your credit card. I haven’t received any more offer in the last month.
June 19th, 2008 at 9:48 pm
This kid will have a nice credit score by the time he’s 19 if he starts using that thing and paying it off. Think about it, a 12 year credit history when you’re 18? I should get some for my kids.
June 20th, 2008 at 8:14 am
I actually started to write saying you should get a credit card for your cat… then I realized he wouldn’t have a social security number. Rats! (Mmm..!)
June 20th, 2008 at 8:45 am
He’s got a higher credit limit than I do. Wow.
July 17th, 2008 at 3:07 pm
I’ve always thought it was important to help your kids start with a good credit score. So my children were users on my Visa account (I have excellent credit.). BIG MISTAKE!!!
My 18 year old got an American Express card with an $18,700 limit. He made about $6,000 last year at his part-time job. He uses his credit card for eating out, gas, clothes, anything he wants. He’s charging $500-1000 per month. He has only made one payment on time in 6 months, so his interest rate is 29.7%, and he gets a $38 late payment fee almost every month.
Now I wish I had never paid with anything but cash when my children were around!
July 29th, 2008 at 9:38 am
When I was younger I used to sign up to get free stuff online, only under “name” I would put “Dr. Evil.” Dr. Evil still gets credit card offers 8 years later.
July 30th, 2008 at 3:16 pm
Im 17 with a job and a checkings acount im sure i can handle a credit card but i dont no how to get one without lying about my age does anyone know how i get one?
July 30th, 2008 at 5:31 pm
Carlos,
You cannot legally get a credit card until you are 18. I believe you can get a pre loaded credit card that you pay first. Many banks have those.
July 30th, 2008 at 6:04 pm
@carlos
http://consumers.creditnet.com/Library/Credit_Card_FAQ/Im_under_18_Can_I_get_a_credit_card.ccfaq_003.php