Smells Like Teen Spending

I was painting my deck and fence yesterday with some high school students that my wife recruited (one benefit of having a high school teacher as a spouse is that you are never at a loss for good baby sitters and cheap physical labor). As we were painting, one the girls whipped out her cell phone and started to hold a very public conversation with her friend about borrowing $10 so that she can put a Homecoming dress on layaway (“Borrow” $10?!?! I’m about to pay you much more than that in cash!)

That’s my point. Here is a teenage girl, an hour away from cash income, and she’s already working a “loan” to cover her spending. This is worse than a payday loan – it’s a post-payday loan.

In reality, aren’t these teens a fantastic market for us to target?
- Many have ATM/Debit cards
- Too many have credit cards
- They have nothing but DISPOSABLE income

But while targeting teens for checking and credit cards, I feel we have a responsibility to help them become more fiscally sound banking customers too! A few ideas came to mind as I lay in bed last night pondering this subject:
- Why not offer a special low balance, low interest credit card for teens. Too many companies take advantage of teens with 20%+ interest rates. If a card only has a $500-$1,000 limit, where’s the risk vs. the gain of building great relationships at a young age?
- Why not make students pass a written test about saving and credit before credit or debit cards are approved? If nothing else, it would help them to think about money in a new way and would differentiate our efforts in the minds of the student’s parents (and don’t we want to be hero’s in their eyes?)
- Many of us sponsor school activities, but how many of us really leverage them? Why not negotiate to hold a student focus group at the school. Use it to learn:
. - What percentage of students has a checking account?
. - Did they simply choose their parents bank or credit union?
. - Do they understand how interest works on credit cards
. - What features are they looking for (text updates, online banking, etc.)

I’ll have these students back tonight to finish the painting; maybe I’ll hold my own teen focus group and get back a little more for my investment than a beautiful back yard.

Cheers.