Start ‘Em Early

Remember that green papery stuff you used to carry in your pocket? The stuff with presidents on it that’s stuffed into bags during bank robberies or, if you’re in the skate industry, is employed to light your cigar? Cold hard cash. If you didn’t have the greenbacks, there were other ways to conduct commerce. Like if you got off on lugging around a pad of paper, you had the next best thing?checks. But cash and checks are becoming relics of the past. Once credit cards crept into our wallets, the rules changed. Legal tender was all in your head; a swipe of the plastic and the dinero turned digital. Checks and cash are slowly exiting everyday life.

Good news for credit-card companies, who often encourage consumers to spend more than they have by upping their limits to absurd amounts, and then nailing them with insane interest rates. But the card companies realized that a huge demographic of manic shoppers remained untapped. It’s that eccentric bunch, the folks who stereotypically drive too fast and experiment too much. If teens feel invincible toward life, imagine the amount of caution they’d apply to their credit rating.

There is a solid wall that, depending on which way you tilt your head, protects pre-adults from credit-card predators, or protects card companies from abuses by persons who aren’t legally accountable. But leave it to plastic people to figure a way to circumvent that. Retail stores across the board, and even skate shops, are seeing a rapid increase in prepaid credit cards wielded by kids who still sleep with the lights on.

Armed With Plastic

“Sometimes parents would fax in their signature and I.D. authorizing us to allow their kids to use their credit card,” Sam Powers, buyer and supervisor at Surf Ride skate shop in Oceanside, California says. That’s a lot of messy choreography that most parents wouldn’t bother with, so the credit-card companies developed the perfect solution–the prepaid credit card. Parents can load up the card from the phone, Internet, or have a scheduled deduction from their checking account, and their kid can spend however much is “loaded” (visa.com’s words, not mine).

Once the card is activated, kids can shop without dragging their parents around. “Teens can use the card everywhere Visa is accepted–for everyday needs, travel or emergencies,” reads the introduction on visa.com. Pictures of teens with ten-percent body fat and zero zits are shown flashing their teeth and Visa cards. “Visa Buxx helps your teen learn to manage their money because you set the spending limits. It’s safer than cash, plus it’s a powerful tool for teaching teens about budgeting and financial responsibility.”

A prepaid credit card is a “powerful tool for teaching teens about budgeting?” Yeah, right.

Ethics aside, the result is that more and more kids are shopping alone. When I visited Surf Ride, I witnessed a pair of twelve year olds walk in, try on two pairs of shoes, pick one, and pay for it with a prepaid card. In and out in less than five minutes. No parent to convince, no parent to complain about the price, no parent to weigh the options, nobody to throw a block between the wallet and the cash register.

In fact, the method in which some kids learn about “budgeting” can get comical. Powers says they’ll often bring an armload of potential purchases to the register only to have their card denied because their “load” has been exceeded. One by one they’ll subtract items, doing the limit limbo until they get under the bar. Prepaid cards have been around for a while, but it’s only been in the past year and a half that stores like Surf Ride have noticed a steady increase in usage. If prepaid card use increases, and the chaperones stay home, it could potentially change how the industry markets to kids. No longer would they have to put their products and marketing through the hypothetical parent filter. The kid in the candy store just walked into the skate shop.

But no matter how much the credit–card companies try, they can’t compete with kids’ genius in manipulating their parents. “Kids usually spend more time in the shop with their parents,” Powers says, adding that the extra time means more opportunity for the kids to negotiate purchases. “I think they still spend more money with their parents–they know they (parents) are the unending well of money.”