My daughter is 18 and i have just discovered she has taken out a store card. What shall i say to her?

Question

I am not happy cos i feel she might run into debt. She only has a small part time job that doesnt pay well as she is at college. I'm picking her up in a few hours and while she is a captive audience in the car, i want to speak to her about the whole thing. Sensible advice from adults only please.

Answer 1

just let her know you worried because that's how people get in to debt and that you'd rather she didn't have one. say if you ever need help don't get into debt ask me for help. that's what my dad yous to to say to me.
good luck. I'm not a parent but i am adult (21).

Answer 2

Way to be concerned and on top of things. how much damage can she really do with a store card? This can be the cheapest lesson she learns... So long as she learns.

I would get her a binder to keep her financial statement in from the card. Have her place each statement in her folder to "keep her organized" after 6 months when she is still paying for that $80 pair of jeans she had to have, go back through the statements with her and calculate how much interest she paid to calculate the total cost of those jeans. Now tabulate how long it took her to work for that dollar amount at $8.50 an hour.

At the same time, put $80 into an interest bearing account and show her what interest does on the other in. If you want to really drive it home, add the amount of interest into the account that she is paying on the credit card.

Now, you didn't tell her what to do with her money that she earned. You did however educate her on compound interest and why credit cards are bad and savings are good.

All in all it may cost you a total of $500. Much cheaper than any college course and it will make up for itself for eternity literally a million times over.

Answer 3

The problem with store cards is that the rate of interest that they charge is so exorbitant. she probably got lured in by some attractive join now deal. Tell her that she will have to pay more for the item later then if she had just saved her money and waited. The way these companies make money is by charging high rates of interest on the debt-they want people to get in the debt !!!Tell her the best way to get discounts on clothing, is to wait for the sales or maybe she could get a part time job in one of these stores ??
Good luck and remember ! - you are not an evil, fun spoiling parent ! All financial advisers advice against getting store cards

Answer 4

Tell her that on the whole Store cards charge really high rates of interest typically 20-30% or more which is much higher then most credit cards, there charges for missing a payment are usually a lot higher as well, maybe you could get her an additional card for a credit card you already have that way you can help her budget better and help her keep from spending what she can't afford.

Answer 5

Explain to her about extortionate interest rates and look at some of the other options (i.e. low introductory interest rate credit cards) - compare the two and work out together exactly how much she'll be paying for her purchases. Some store cards charge over 25% interest, so it's worth having a little financial discussion with her - she might not know these things! Good luck.

Answer 6

First off: how have you found out? Have you been prying, opening her mail or what? I tend to agree with the person who said that it's no big deal. Like it or not but she is legally an adult now. She might run in to debt now and learn a lesson, or later in life when it might have a far greater effect on her. I'd suggest you said nothing (and I am a middle-aged adult).

Answer 7

Say nothing at all. It will only cause VERY bad feeling between the two of you. Let her work out for herself what a mistake she has made. I took out a store card a few years ago, my Mum start to yell at me, I didn't appreciate her trying to tell me the errors I was making, as a result we didn't speak to each other for months. When and if she asks for financial help say no she will have to sort it out herself.

As much as you love her, you can't live her life for me.

Answer 8

I really wish someone had sat me down when I was 18 and warned me just how evil store cards are. I got myself into £3000 of debt on credit and store cards, and my Dad had to bail me out, and it has taken years to pay him back.

You never have enough money when you are 18, and you think that you have the rest of your life to pay back anything that you do spend, so it will be really hard for her to put your warnings into context. She might even lie when asked straight.

Why don't you strike a deal with her. Tell her you will pay off her store card in full if she never uses one again.

My Dad just kept saying that if I really felt like paying someone loads and loads of interest to owe them money, borrow the money off him, and pay HIM the interest. Borrowing money off them is like throwing money into the crowds in the street.

Answer 9

tell her exactly what you just wrote. Just don't speak at her in a way that will automatically make her defensive. She may not realize that a store card can ruin her credit just as much as a regular credit card. She probably signed up for it to get a discount on the purchase she was making, so she may not intend to use it again. Just tell her that having a card like that is fine if she is willing to take the responsibility for it.

Answer 10

To be honest, anything you do say will probably go in one ear and out the other. Just tell her why you are concerned. Maybe you could offer to look after it, and let her have it when she wants something for a special occasion, that way she won't use it for any old thing that she thinks she likes, just because she has a card.

Answer 11

Ask her about the financial commitments of the card to find out if she knows what she has signed up for.Then she will probably check this herself to find out if she has been taken for a mug.It will be likely then that she will ask your advice.