Wednesday, March 3, 2010

Credit or Kwedit?

The idea of credit has gotten many people in trouble. Buy now, pay later. As my mom would say...I should only buy credit when I have the money. On most days I follow her advice and have stayed out of trouble.

I was watching the Colbert Report for March 2nd and came across and interesting segment about Kwedit. Apparently, this is an online site for kids who can play games and pay later. It's just like in the real world that if you can't pay someone else is asked to pay for you...and of course, your score goes down. I can't really say that there's much incentive for a child to keep a high Kwedit score. Mommy and Daddy will just bail them out. Haven't we heard this story before? Oh yeah...

As of Feb. 22, some of the most prevalent predatory tactics credit card companies use to lure in college students were banned, at least in their current forms.

Last May, President Obama signed into law the Credit Card Accountability, Responsibility and Disclosure Act. This act contains new credit card rules and regulations intended to protect college students. It became enforceable Monday for most major banks.

I guess this means that it's still okay for kwedit to target children (13+ according to Kwedit) because they're not quite in college yet. If we as adults and college students have trouble understanding/managing credit, how will promises change that with a 13 year old?

Fiscal responsibility is spending what you have, not what you're going to make. Because you may not have a job next month or you may have other expenditures that you didn't count on next month so you can't pay on time. It happens to the best of us and the worst of us. There are no guarantees that the income you have today won't ever change.

Granted, there are times when a line of credit is necessary - student loans, car loans, mortgages...but in my opinion purchasing clothes, going to the movies, paying off your regular bills and buying food are things that shouldn't be done on credit. Spend what you've earned and save a little for those emergencies or fun things you'd like to do in the vacations. Don't push it to the line or go in the red on a regular basis, you will be bitten. Mommy and Daddy won't always be able to bail you out...even if a promise was made to help you.

Ah buy or not to buy...that is the question. Make sure you check out sometime and let me know what you make of the idea and the company.

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