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Teen credit cards spark controversy
26/01/2006 13:35:00
The launch of a new credit-style card for children has caused controversy, with campaigners claiming that it promotes a debt culture.
MasterCard is targeting teenagers with the launch of its new prepayment Splash Cards, the Times reports.
The cards work in a similar fashion to pay-as-you-go mobile phones and spending is limited by parental deposits, meaning that children cannot go into debt while using the cards.
However, opponents claim they will familiarise children with spending money on plastic, making it more likely that they will apply for a credit card and fall into debt when the opportunity arises.
The National Consumer Council (NCC) described the cards as a "dreadfully bad idea", warning that they will acclimatise children to spending money that is not theirs.
"There is a risk that the cards will predispose them to irresponsible spending on credit cards later," warned a NCC spokeswoman.
However, Phil Davies from MasterCard suggested that the Splash Cards might help improve young people's financial education.
"These cards have a positive part to play as they can help teenagers and adults to improve financial discipline as they manage the money placed on the card sensibly," he said.
Additionally he reminded critics that parents retain full control over their child's spending.
Previous findings from the Consumer Credit Counselling Service reveal that credit and store cards are the leading causes of debt among older teenagers.
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