I bet the banks did not think of this when they invented credit cards!


Children with credit cards to access Online Video Games.

What could go wrong?


Well, a lot. There are many stories on the internet sharing the traps developed by the gaming industry. It is a free country. Adults are free to max out their credit card dressing their character in a video game. But what if I told you that children under 18 play video games allowed by their parent and then rack up thousands of dollars in credit card bills by purchasing additional “In App” purchases? “Gaming is a World of Heavy Sales Pressure and Frictionless Theft”, says Evan V. Simon. Parents discovered the charges of their children, which resulted in financial hardship for years. There are no safeguards with online gaming No cashier to stop reckless spending. No tangible product to return to the store for a refund.


Online gaming addiction is a problem. Free mobile games make most of their money from “In app” purchases from compulsive customers, says Simon.

In Fortnite you can buy virtual clothes to upscale your character. You can play the game free forever, but if you want “Bling” you can buy a Battle Pass or Battle Bundle. Kids racked over $4,000 in charges without realizing and created a credit card statement with many pages filled with many 1- and 5-dollar charges. According to USA Today Sports, a kid spent $7,600 on an FIFA game. In the UK, another kid spent $6,000 on Jurassic World. There are many stories. It is not just occasional accidents. I overheard conversations in my classroom describing the amount of money spent on online video games. If the tales are only half true, the numbers are staggering. The credit card company does not care. The charge is not fraudulent. Your dimple darling used your credit card with your permission to make the purchase.

https://www.CreditCards.com/credit-card-news/whos-responsible-kids- unauthorized-charges-1279.php

You could call the police and have your own child arrested, but that sounds expensive and harsh. It has happened.

There may be some protections…..

If you are lucky, you might get a refund. Steam refunds games but has a two-page return policy. Get a refund for in game purchases within 48 hours of purchase, provided you have not consumed the item you bought. (Did you buy a cheesecake?) Whole game purchases are refundable within 14 days if you played the game less than 2 hours. Regardless, Lots of provisos, limitations and addendum.

https://store.steampowered.com/steam_refunds/

Fortnite’s Epic Games has very similar refund policies.

https://www.epicgames.com/site/en-US/store-refund-policy

The FTC (Federal Trade Commission) came to the rescue.

In 2017, Amazon refunded $70 million worth of APP purchases made by kids.

In 2014 Apple provides consumer refunds $32.5 million to settle FTC complaint regarding “Kids” In-App purchases without parental consent.

https://www.cracked.com/personal-experiences-2570-how-young-gamers-can-quietly-ruin-their-parents-finances.html

Again, credit cards are powerful financial tools that require proactive, “on top of it” management and supervision. They design these games to get you addicted and comfortable making impulse purchases. If you are a kid, or an adult, it is easy to get duped. Maintain complete control over your card. Children can survive without hours, and hours of mobile device time.


Suggestions for Protecting Your Credit Card

· Go to Walmart and buy a lockable file box. Put your wallet and/or credit cards and credit card statements inside the box and lock it. Your child only needs your credit card number and expiration date to begin their spending spree.

· Secure your computer. Make sure access is password protected so that not just anyone can open your computer and start a purchase party.

· Teach your child about real money. Start by providing them an allowance for “extra” chores. Everyone has unpaid chores. You can pay a child for extra work. They can cut the grass or clean gutters. Trade the time that he or she is using to waste time on video games and convert the time to doing something useful for the family. Sound old fashioned. Yep! And it works. After they see real cash, take them to the bank and to the grocery store to understand the world uses real money.

· Discuss credit card use responsibility with your children. Clarify household money rules. Make sure they understand they do not have permission to use yours or anyone else’s credit card. It is a real and serious crime.

https://www.CreditCards.com/credit-card-news/whos-responsible-kids-unauthorized-charges-1279.php

https://www.CreditCards.com/credit-card-news/kids-and-credit-cards-poll/

Try a card that has programmed restrictions.

Consider using a card like Greenlight. It is a card designed to teach positive money rules. In addition to its ability to provide guardrails to your teens spending, the app can keep track of chores and manage allowances. There are two sides to the App. A parent side and a child side. The parent has access to set up the parameters that the child will follow. It costs $4.99 per month for up to 5 kids. https://www.greenlightcard.com/

Personal Note I know a child, under 18, who has a credit card and habitually wakes up late for school and takes an UBER. In my opinion, the child is not learning how to make good financial choices. What do you think?

Are you a parent who has experienced a child abusing your credit card? Care to share your story?

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Ken Remsen has passed a criminal background screening

Candidate AFC®, Association for Financial Counseling and Planning Education

Member, American Association of Daily Money Managers

Insured, Lloyds of London

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