CHARLOTTE, N.C., March 3, 2022 /PRNewswire/ -- Nearly half of
parents (46%) say that they've caught their kids secretly spending
with their credit or debit cards without asking, according to a
recent survey by LendingTree®, the nation's leading
online financial services marketplace. That's up from 29% of
parents who said the same in 2018, when a similar survey was
conducted. The ease of mobile payments, in-app purchases and
one-click ordering can cause even the youngest children to create a
dent in a family's financial well-being.
Key findings
- Six in 10 (60%) parents with children younger than 18 have
let their kids borrow their credit or debit cards to make online
purchases, and nearly half regret it. Fathers are more likely
to share their cards with a child than mothers, but they're also
more likely to regret doing so.
- Nearly half (46%) of parents with minor children say their
child has used their card without permission at least once.
That's a 59% increase compared with 2018, when 29% of parents
reported secret spending.
- Kids who took their parents' credit or debit cards without
asking racked up more than $500 on
average. Widespread access to tech innovations could be one
factor; the most common instances of kids spending without
permission include in-app or in-game purchases (28%), ordering food
delivery (16%) and purchases made through voice-activated speakers
(15%).
- 1 in 4 parents argued with their child about money last
month, and more than a third of arguments were about using a credit
card without permission. Taking cash without asking was another
source for frustration, at 25%. Fathers were more likely to argue
with their child about money than mothers.
- Kids whose parents earn $100,000+ are nearly 5 times as
likely to be an authorized user on their guardian's credit card
than those whose parents earn less than $35,000 (37% versus 8%). Authorized users
have a leg up in building credit history (so long as the card is
used responsibly), potentially leading to better scores and lower
interest rates in the future. Overall, 22% of parents say their
minor child is an authorized user.
"Between in-app purchases and one-click ordering — especially in
households where family members share devices and passwords — it's
become much easier to use someone's card without permission
nowadays," says Matt Schulz, chief
credit analyst at LendingTree. "Then, you factor in that many of us
have spent far more time than usual inside, staring at screens over
the past two years, and it makes sense that kids might have used
cards without permission a bit more than before."
Kids and Credit Cards: Quick Tips
Building credit from
a young age can be a smart move, as long as the card accounts are
handled responsibly. Not every kid under 18 is mature enough to
have a card in their name, notes Schulz, but there are some steps
that you can take to ease them into the world of credit.
- Start with a prepaid or debit card: Parents and
guardians can monitor activity and use these cards as a jumping-off
point for important money management conversations.
- Make responsible teens an authorized user, and keep close
tabs. Most card issuers let you track spending through
apps, websites, text messages and more. Take advantage of
this technology, says Schulz. With a LendingTree account,
cardholders can track spending across multiple credit cards with
unlimited access to credit scores and reports. Bonus tip: If you're
interested in building a child's credit early, but don't think
they're ready, you don't have to actually give them the card, he
adds.
- Do a credit 101 lesson with your teen. Explaining how
credit behavior can impact their credit score, and in turn, their
ability to get a car loan or an apartment in the future is so
important, says Schulz.
- Look for cards suited for first-timers. Schulz
recommends student credit cards, which are available once kids turn
18. A secured card can also be useful because it minimizes the
risk involved for everyone.
To view the full report,
visit: https://www.lendingtree.com/credit-cards/study/kids-and-credit-cards-survey/.
Methodology
LendingTree commissioned Qualtrics to
conduct an online survey of 1,051 parents with children younger
than 18, fielded Jan. 11-14, 2022.
The survey was administered using a nonprobability-based sample,
and quotas were used to ensure the sample base represented the
overall population. All responses were reviewed by researchers for
quality control.
About LendingTree
LendingTree (NASDAQ: TREE) is the
nation's leading online marketplace that connects consumers with
the choices they need to be confident in their financial decisions.
LendingTree empowers consumers to shop for financial services the
same way they would shop for airline tickets or hotel stays,
comparing multiple offers from a nationwide network of over 500
partners in one simple search, and can choose the option that best
fits their financial needs. Services include mortgage loans,
mortgage refinances, auto loans, personal loans, business loans,
student loans, insurance, credit cards and more. Through the
LendingTree platform, consumers receive free credit scores, credit
monitoring and recommendations to improve credit health.
LendingTree proactively compares consumers' credit accounts against
offers on our network and notifies consumers when there is an
opportunity to save money. In short, LendingTree's purpose is to
help simplify financial decisions for life's meaningful moments
through choice, education and support. LendingTree, LLC is a
subsidiary of LendingTree, Inc. For more information, go to
www.lendingtree.com, dial 800-555-TREE, like our Facebook page
and/or follow us on Twitter @LendingTree
MEDIA CONTACT:
Morgan
Lanier
morgan@lendingtreenews.com
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SOURCE LendingTree