Credit cards have been a solution that many parents, including me, have had to rely on up to now. I feel a lot less comfortable giving my child cash or a credit card. I think for younger people and families this is a convenience and a service. And it provides an opportunity for parents to budget. Internet companies such as DoughNET , iCanBuy and RocketCash are responding to that concern by setting up virtual malls with stores appropriate for teens.
Parents set up prepaid accounts for their children.
Some of the sites incorporate learning tools to teach kids about banking. That would turn them off. Issuers such as Capital One who are reaching out to minors with major credit cards must follow the same federal disclosure laws they do for marketing to adults. Whether they are selling by mail, telephone or the Internet, banks are required to reveal costs such as annual fees and finance charges. States, in turn, usually give that authority to local school districts.