More kids are going on secret spending sprees

When I last wrote four years ago about the growing number of children using their parents’ credit or debit cards without permission, the number was stunning.

Guess what? The problem is even more out of hand now.

Blame it on parents being too trustworthy or lackadaisical with their credit and debit cards. Blame it on kids not understanding the consequences of taking their parents’ plastic and going on spending sprees. Yes, to both.

Then add in the factor of kids spending more time in front of a screen because of the pandemic, which also means more opportunities to spend on retail apps that make it easier to purchase food, clothing and new battle armor for an online game.

Lending Tree has explored this topic in recent years, and has some survey data that supports the troublesome trend. In its latest survey released in early March of more than 1,000 parents, the financial services company found that nearly half of them with children under age 18 said a youngster had used their plastic without permission at least once.

That’s a 59% increase from 2018, when a similar survey found that 29% of parents reported “secret spending.”

Certainly, some of the spending was done accidentally, but not all.

“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,” said Matt Schulz, Lending Tree’s chief credit analyst.

We’re not talking solely about nickeland-dime spending either. According to Lending Tree, kids who took their parents’ credit or debit cards without asking ran up more than $500 in bills on average.

Here are more data points from Lending Tree’s survey:

The most common instances of kids spending without permission included in-game or in-app purchases, ordering food delivery, and purchases made through voice-activated speakers, such as Ask Alexa.

Sixty percent of parents have granted their kids’ permission to borrow their credit or debit cards to make online purchases — and nearly half regretted it.

About 25 percent of parents argued with their child about money recently, with more than a third arguing about using a credit card without permission.

I asked Schulz what parents can do to flip the spending script. “The best thing parents can do is to be proactive,” he said. “Talk openly and honestly with your kids about boundaries, expectations and consequences around (unauthorized) online spending.”

In sterner terms, kids need to know that using mom or dad’s credit card without permission “isn’t too different from stealing cash out of their wallets,” Schulz added.

The expectations and consequences vary depending on your kid’s age, maturity level and other factors, but make sure the rules have been stated clearly with no chance of misunderstanding, he said. This is also an opportunity for parents to explain how online games are loaded with opportunities for kids to run up charges on gaming upgrades with a quick click.

Finally, Schulz said, it may be worth talking to your kids about what would have happened if they had used a friend’s plastic to spend. After all, he said, if you “steal money from your job, your friends, your school or someone else, things can get pretty serious in a big hurry.”