According to studies, about a third of all high school students actually carry a credit card that is co-signed by their parents. This really raises the question of whether kids in their teens are equipped to handle credit. Will having a credit card too early instill bad money habits?

I am having serious reservations about letting my kids have a credit card when they are in high school. I did not even have my own credit card when I was in college. My parents did give me a credit card when I took a little vacation when I was in college. I only got my own credit card when I started working. Here are my thoughts and reasons why a high school student should not have credit cards.

1. They are at an age where peer influence is great. What brand of shirts they wear, what cell phones do they have are terribly important things for high school kids. To a certain extent, any kid will be influenced by their peers in school. I fear that if a high school student sees their peers simply take out a card to stuff, they will think it is “normal”.

2. Young adults need to learn the concept of delayed gratification. With credit cards, it is so easy to fall into the trap of ing things before you have earned it. I’ve met many people who have always paid their bills (including credit card bills) in full every month. The one common thread among them is that their parents have brought them up with the concept of never getting into debt.

3. Kids need to learn that you have to earn something before you can something. That was what my parents have taught me. Before they bought a TV, they made sure they had enough to either write a check or pay cash. I do not want my kids to have more credit card debt in January after a Christmas binge when they are adults.

4. I feel that my kids need to be taught that the ability to have credit has to be earned. One of the reasons I never carried a balance was because I felt that I was so used to making sure I had cash before I spent on anything. I’m not too sure that I’ll have the same atitude if I was given a credit card early in my life.

How about Prepaid Credit Cards?

Some parents might argue that giving a high school student a prepaid credit card is a good way to start learning about money management and budgeting. Well, in my younger days, there was no such thing as a prepaid credit card. Perhaps a prepaid credit card is OK, but I’m not totally convinced.

If you have ever given your high school kid a credit card, I would like to hear your experience.

It was 4pm on Saturday afternoon and we still have an errant to run. We promised ourselves we would get to Best Buy to purchase our SLR camera & video camera or we would not have them in time for the kids Halloween celebration. Plus, the special discount offered by best Buy is for 5 to 8 Oct only.

For dinner, I suggested that we (2 adults plus 3 kids-8,6 &4 yrs old) try the food at Cheesecake Factory at the King of Prussia Mall but my 6 yr old really wanted to try ribs at TGI Friday – which we go regularly. Hummm, sounds good too. So we ended up there.

We didn’t have to wait long to be seated because many in front of us opted to sit at smoking section so it shorten the queue for us. While waiting, we looked over the menu as we were hungry and was hoping to make our ordering easier. However, we waited for a long time & no server came. So, waving my hand at the staff, a gentleman with tie (not in uniform) came over and said OK – he’ll get our server. After for more than 5 minutes, our gracious server appeared and appologised that there was a confusion and she is will taking our orders. I told her that the kids are very hungry so please serve their meals first. My 4 yr old ordered spaghetti, my 6 yr old ordered ribs & the oldest child ordered pizza. We ordered a 3 course special which is $16.99 – the baby back ribs with shrimps, loaded potato skins & dessert. I ordered the steak salad.

The ice tea, apple juice & chocolate milk came. The kids were happily drawing, coloring, decoding, connecting the dots. When they finished, the food still hasn’t arrived.Then we waited & waited & waited. Meanwhile, my kids were drinking like mad and you know how that hurts appetite. They were also starting to get restless. Finally we see our server & waved her over. She said the kitchen is very busy – indeed, the dinner crowd was probably at its peak. I was losing it & told her it is not acceptable that a kid’s spaghetti (only has sauce on it – not even meatballs) takes so long. I said I understand the ribs & pizza will take time but cannot believe that spaghetti needs as much time. I reiterated that I specifically requested for the kids meals to served first. The least they could do was to bring out the spaghetti first. Our server apologized and said she will go to the kitchen to check our order.

Finally, the kids spaghetti came – surprisingly small portion, which is OK by our standard. (so we don’t need to waste or doggy bag. At lunch, the portions always seemed larger) Minutes later, the kid’s ribs & pizza came. Our food came out subsequently.

Now, on the flavor of the food. My steak in the salad was so salty. Then, my husband gave me some of the baby back ribs and it was very dry with hardly any glaze on them. We didn’t even finish our food. When our server came to check on us, I hesitated giving her my honest opinions. I was just too tired & “resigned” to bad service and food – just wanted to go home & open a can of campbell soup. When she came around to take our order for dessert, I hinted that the baby back ribs was disappointing, certainly below our expectations. (I could not even bother to mention how salty the steak salad was. She realized that we didn’t eat alot and said she felt sorry we were let down. Shortly after, a tall man with shirt & tie came by & apologised for all the service hiccup and for the baby back ribs which were too dry. He was very sincere about it and said “he will take care of it”. We didn’t know what he meant but was glad that management is aware of the poor service & food quality we experienced. I worked as a hotel sales persons for many years and always embraced constructive feedback.

When the dessert came, our server brought us the check & informed us that they have removed the baby back ribs entree to compensate for our bad experience. That was a very nice gesture we thought. Minutes later, the manager who came to apologize to us gave us 2 gift certificates – valued at $15 each – as another gesture of goodwill ! I told him he didn’t have to do it but he insisted and wanted us to come back again.

I am always hesitant at giving feedback to service personnel (for fear that they take it the wrong way & retaliate) but at the same time I believe it is the only way they will ever know if they are delivering the right standard. Of course we have to be reasonable and provide constructive feedback and give compliments where it is due to. I remember the last time we were at TGI Fridays in late Aug for lunch and I ordered a pasta with seared salmon. I requested that my salmon be medium rare & the server said she will pass on the request to the kitchen but please understand that they are not “gourmet” chef in fine dining restaurants. She and I laughed & I said I would not raised my expectations. My food came and the salmon was exactly the way I wanted it – raw in the middle. Yummy indeed ! I gave them heaps of compliments on the spot.

Overall, I would say we are still happy customers at TGI Friday’s – King of Prussia, PA. Kudos to all the staff there who worked so hard.

As I was not able to highlight my favorite posts for the carnival due to how I presented it, here are my picks for the Editor’s Choice (in no particular order)

Will consumers warm up to credit freezes? by Grad Money Matters was chosen because this is a current issue which I have not read too much about.

How we chose our credit card by A Penny Closer is a post I would have mentioned on my site regardless of the carnival. This is a real life example of a family’s credit card decision.

I have to congratulate My Wealth Builder who has retired in his forties. What I found interesting was how he works closely with his financial advisor, who has ran monte carlo simulations on his portfolio and looked closely at the probabilities of him maintaining his standard of living. This is clearly a more sophisticated approach than many of us have taken.

10 tips for dealing with a lost wallet by Five Cents Nickel caught my eye because of it’s catchy headline. It’s a unique post on something that sometimes happens to us.

If a picture says a thousand words, then SVB’s Digerati Life Blog certainly says a lot. I liked this post because it depicted her real life experiences in selling her cars. The picture was the icing on the cake. Check out 7 steps to a smooth car sale.

How convertible bond arbitrage works by Million Dollar Journey is one of the best post I’ve come across simply because it tackles a difficult topic. Though we are hardly going to get involved in this form of investing (this is strictly hedge fund and investment bank’s trading desk territory), it’s such a refreshing change from reading the usual “investing in low cost index funds is the greatest invention since slice bread blah” that is so common in the pf bloggersphere.

Mr Credit Card : Welcome to the Carnival of Personal Finance #121 – Columbus Day Edition. Today’s event is a Q&A session with our leading presidential candidates. As the presidential candidates from both parties continue their campaign, the carnival of personal finance is pleased to announce that Senator Obama, Senator Clinton, Ex-Governor Guliani and Senator McCain have agreed to appear before personal finance bloggers for a question and answer session with regards to their policy platform. Please give our guest a round of applause.

Let us now begin.

Everyday Finance : I would like to direct this question to all of you. I am concerned about the weak dollar and how much it has depreciated against other currencies. The question I have is is the weak dollar driving US companies into the arms of foreigners? And are any of you concerned about this?

Senator McCain : We have to let the market forces determine the level of the US Dollar. But having said that, I am concerned about the dollar but I also think that once we get the war under control and our budget deficits under control, we will start to see a turnaround of the dollar.

Senator Clinton : In the 90’s, the United States had a strong dollar policy. Having said that, we were in a much better shape than the present. Right now, we have a massive deficit and an administration whose sole concern is the war and the dollar is suffering from this benign neglect.

Exjackly : This question is addressed to the two democrat candidates. I am a business owner and I am concerned about the democrats inclining to raise taxes. Since you took over congress, you have raised the minimum wage and it has affected many small businesses including mine. My business hires mainly students and simply cannot see why students should be benefiting from this bill!

Senator Clinton : As a society, those of us who are much better off cannot afford to overlook those at the bottom of the rung. But I would say that it is not just your business that will be affected, but even your competitors will be affected. I believe that in starting a business, all you need is momentum

Bewildement from the audience.

Mayor Guliani : As a republican, I really believe in letting the market forces determine what should be the appropriate wage. I fully understand the position of business owners like yourself. In fact, I can even show you how to live on minimum wage?.

Finance is Personal : The senate finance committee has recently questioned certain practices by credit card companies and as a result, we have practices like the universal default clause not being practiced anymore. I would like to ask all of you if you have any thoughts as to how we can change America to become a nation of savers rather than being a nation of debtors? Also, do you think will consumers warm up to credit freezes? since we have to pay for these services?

Senator McCain : All of us want Americans to be a nation of savers. Unfortunately, we are also a free country and that means that consumers should be able to choose whether to use credit and businesses are able to extend consumers credit. What I think is important is that perhaps we improve the means where consumers can get better educated on issues like how much credit is optimal?, or even how to fight back against debt collectors.

Senator Obama : I have to agree with Senator McCain on this issue. I think what the Senate Committee of Banking and Finance have done with regards to the credit card industry is very good. We have to ensure that credit card and finance companies provide more disclosure, eliminate fine prints and ensure they adhere to honest advertising. Consumers ultimately have to be responsible in how they use credit. When I was in college, I read brochures about tips for using credit cards. I can even tell you how we chose our credit card!

Home Finance Freedom : This question I have is this : Do anyone of you think that the mortgage tax deduction that we Americans have is distorting the housing market? Is this encouraging Americans to s homes when they shouldn’t? Why should we get this tax break at all? This to me is an entitlement. In fact, because of the mortgage tax deductions, most Americans fall into what I call the debt free deception – housing myth. Most of us would be better off to pay off your mortgage and lose your tax deductions. For many people, ing is for suckers and why renting is the way to go.

Senator Clinton : The mortgage interest tax deduction has been around for a long time and the premise behind that is that we want to encourage home ownership among Americans. Home ownership is very much part of the American dream.

Mayor Guliani : Bear in mind that about 39% of Americans rent. Hence, I do not think the mortgage interest tax deduction distorts home prices.

Phil For Humanity : What are your thoughts on the recent sub-prime mess? What should regulators do to prevent such incidents again? Look at how Netbank has closed down. And what happens to property taxes of customers with bankrupt lenders?

Mayor Guliani : I honestly think in this situation, it is a new experience for every central bank and regulator. I’m pretty sure that regulators will look more closely at how banks mark to market their structured investments and also at sales practices by mortgage brokers. However, we have to let the market correct itself from any excesses. In fact, now may be the best time to purchase bank foreclosure properties.

Senator Obama : I can also show you a visual guide to finding HUD foreclosures

To laughter from the audience.

Flexo : One of the things that really alarm me is our budget deficit. Yes, we do have a war and I am really disappointed in Republicans who have not really kept an eye on spending. Yet, I am so concerned about the democrats love for social programs and the potential higher taxes that await us? This is probably a sweeping statement from me, but how would all of you respond to the huge budget deficit?

Senator McCain : I really think we have to go back to basics. I think the next administration and congress really need a budget you can stick to. And that means fiscal discipline. Yet there is the balancing act of making sure the economy grows.

Mayor Guliani : I always remember what my dad taught me about money, which is to never spend more than you earn. And I think we politicians have to get back to basics and all of you have to make us keep feeling guilty to spend money on anything. The budget deficit is simply unsustainable.

Senator Obama : I agree that we have to seriously figure out how to get out of debt?. The fiscal situation has gotten out of control. A big reason is obviously the war in Iraq. While we cannot rush a total troop withdrawal, we have to be extremely conscious about the fiscal situation.

Gather Little by Little : I would like to address this to the two Democrat Senators. Both of you mention about fiscal responsibility, but yet at the same time, both of you are proposing univeral health care. Who is going to pay for it? Wouldn’t that be already adding to our fiscal problems? Or is this an easy pitch to get elected?

Senator Clinton : The fact remains that 48 million Americans have no insurance and for such a great nation like ours, this is simply unacceptable. If the Canadians and Europeans can do it, shouldn’t we be able to provide health care for everyone?

Senator Obama : Our current system is broken and heath care inflation is running out of control. We have to make health care affordable again.

Mayor Guliani : I think we have to be very careful when we are talking about health care. There are no easy fix. But I suspect that every party has to accept certain changes to make our health care more affordable. I think incrememtal steps are needed in this area rather than a large sweeping move taking us into the unknown. It is also a question of uncovering the truths about needs and wants of the American people with regards to health care. I do not think we are willing to accept the sacrifices and consequences of a universal health care system.

Senator McCain : I’ll give you a few tips for getting low cost health insurance after this is over! But seriously, the proposals from the democrats fail to explore the shortcomings of the Universal system. Americans I think, do not have the patients to wait for their treatment as most patients in the Universal Health Care system do. Many of the 48 million also choose not to have insurance because costs are too high.

Senator Clinton : I question if is penny pinching really the road to wealth?. We also have to address the issue of fairness and equity of those who are less well off in our society.

Laughter from audience.

Free Money Finance : This is not a question, but just a comment and request. I am absolutely sick and tired of how partisan things get when a president nominates a supreme court judge. I get my fair share of strange interview questions, but the questions and scrutiny that a supreme court judge nominee has to go through is ridiculous.

Mrs Micah : This is another comment. But I am simply disillusioned by all politicians. Every campaign promise is never really fulfilled. They are just made to simply get votes. Even if you have the best intentions, the influence of lobbyist simply results in all of you selling and sucking your soul.

Chief Family Officer : Since President Bush passed his “no child left behind” scheme, I just wanted to get a perspective on how we are progressing as a nation. Where my family is, public schools are still not up to scratch. That is why we are sending our kids to private school. And man, you would believe what we’re giving up for private school and why.

Senator McCain : I think we are making progress on that front. Studies have shown that we are behind many countries, especially in the area of math. Progress will not be uniform across the board though.

My Wealth Builder : I’ve retired in my forties, but given the amount of student debt that students carry after the graduate, I think that early retirement may not be optional for twenty somethings. I question is how can we contain the inflation in education costs?

Money Walks : I would like to ask all of you how does your portfolio look like? An d what money lessons have you learned in your personal life?

Senator McCain : Firstly, in terms of attitude and metality, I thinkit is very important for us to understand why everybody should think like a CEO when it comes to their personal finance.

As far as investments goes, I have a money market account. Stop asking yourself do I need an emergency fund? Off course you do. You should start saving and let money build right away. I would not even waste my time day trading or any of that as I think that trading is for losers. Instead, I would learn how to pick an index fund with low initial investment.

Mayor Guliani : After what happened on 9/11, I would say that the first thing you have to do is to figure out how much life insurance do you need?

Once you have taken care of your emergency fund and your insurance (your back up plans), I would then educate myself as much as I can on personal finance and invest wisely. I recomend reading A weekend with Warren Buffet and other shareholders meeting adventure and lessons from Fire Finance top 100 pf blog list. Most important of all, be patient. Remember that the 1st Million is the hardest to make and that once you cross that hurdle, everything is much easier.

Always know in your mind the 25 mutual funds every investor should know. Somrtimes, the investments I don’t have is more important than what I have. As you get more affluent, consider a Roth IRA if you think you will be in the top tax bracket when you retire. Also consider hiring a financial advisor and do some advanced portfolio building

Senator Obama : If I had a personal finance time machine, I may do things a bit differently. With the internet and the explosion of different investmtent and money magazines, I would have educated myself a lot more when I was younger. But evolution of my online personal finance regimen has gone through a lot of changes. I now do all my banking online and enroll in various automatic bill payments.

Being Frugal when you are starting out in life after graduation is very important I think. You should always stuff you can afford. Do not follow the example of the US government! For example, I never have a car payment. However, you definitely want to be learning how to be a gazelle intense without going crazy. You also want to watch yourself and make sure you do not have the making of a cheapskate!

Senator Clinton : One of the most important things in my opinion is that you have to do the right things for yourself and your circumstances. Let me give you a few examples.

If you are in debt, you have to ask yourself if consolidating your debt is worth it? Only you can answer this question. Or if you have to file for bankruptcy, then learn to rebuild your credit score after bankruptcy. I even know people who sell coupons to pay for diapers! Bill even recently told me about the 3000 Mile Oil Change Myth. Even things like setting up a virgin prepaid cell phone or
prepaid electricity can save you money

Where you decide to live also has huge bearings on you finances. I can tell you it is definitely cheaper to live in Arkansas than in New York. If you are living in a high cost area, and moving is going to save you a ton of money, then consider doing it.

Communications and personal finance relationships is also very important. You have to be able to communicate your finances with your spouse or partner. This became very important for me since becoming the bread winner. Strive to become debt free and pass your personal finance tips to others. Remember, we all go through ups and downs and sometimes, you have to be looking at life from a stock market perspective!

Dough Roller : I would like to ask the four of you what are your favorite personal finance books? or at least what have you read in this arena?

Senator McCain : My favourites include 30 ways to use one hour to improve your finances by the The Simple Dollar, 5 things that can appreciate in value by Finandom.

Mayor Guliani : My favorites are free your inner spender, 10 tips for dealing with a lost wallet, and the tortured lives of Mr and Mrs Jones.

Senator Obama : My favorite personal finance book is 7 steps to a smooth car sale, how convertible bond arbitrage works (laughter). Yes, it’s true, I am really facinated by the financial markets. I also think that Benjamin Franklin is the original personal finance blogger.

Senator Clinton : My favorites include my son came across a pyramid scheme and is this really what we want to teach our kids?.

Mr Credit Card : We have finally come to the end of his fantastic Q&A. I would like to thank our guest who have taken their time to come here and answer questions from the personal finance bloggers, who along with being concerned with their own financial well-being, also care a lot about our nation’s finances. Thank you to everyone for participating. Thanks also to the Carnival of Personal Finance for organizing this event.