46% of Parents Say Their Child Used Their Credit or Debit Card Without Permission, Racking Up $500+

Rhea-AI Summary

According to a March 2022 survey by LendingTree, 46% of parents reported their children secretly using credit or debit cards without permission, a significant rise from 29% in 2018. The average unauthorized spending amounts to over $500. The survey found that 60% of parents have allowed their children to borrow cards, with nearly half regretting it. Conflicts about money, especially related to unauthorized card use, are common, with 1 in 4 parents arguing about it last month. The survey highlights the impact of technology on spending behaviors among children.

Positive

• 22% of parents say their minor child is an authorized user on their credit card, which helps build credit history.
• Parents can monitor their child's spending when they make them authorized users, promoting responsible credit use.

Negative

• 46% of parents report their child used their card without permission, indicating a concerning trend in unauthorized spending.
• The average unauthorized spending by children exceeds $500, reflecting potential financial strain on families.

CHARLOTTE, N.C., March 3, 2022 /PRNewswire/ -- Nearly half of parents (46%) say that they've caught their kids secretly spending with their credit or debit cards without asking, according to a recent survey by LendingTree^®, the nation's leading online financial services marketplace. That's up from 29% of parents who said the same in 2018, when a similar survey was conducted. The ease of mobile payments, in-app purchases and one-click ordering can cause even the youngest children to create a dent in a family's financial well-being.  

Key findings

• Six in 10 (60%) parents with children younger than 18 have let their kids borrow their credit or debit cards to make online purchases, and nearly half regret it. Fathers are more likely to share their cards with a child than mothers, but they're also more likely to regret doing so.
• Nearly half (46%) of parents with minor children say their child has used their card without permission at least once. That's a 59% increase compared with 2018, when 29% of parents reported secret spending.
• Kids who took their parents' credit or debit cards without asking racked up more than $500 on average. Widespread access to tech innovations could be one factor; the most common instances of kids spending without permission include in-app or in-game purchases (28%), ordering food delivery (16%) and purchases made through voice-activated speakers (15%).
• 1 in 4 parents argued with their child about money last month, and more than a third of arguments were about using a credit card without permission. Taking cash without asking was another source for frustration, at 25%. Fathers were more likely to argue with their child about money than mothers.
• Kids whose parents earn $100,000+ are nearly 5 times as likely to be an authorized user on their guardian's credit card than those whose parents earn less than $35,000 (37% versus 8%). Authorized users have a leg up in building credit history (so long as the card is used responsibly), potentially leading to better scores and lower interest rates in the future. Overall, 22% of parents say their minor child is an authorized user.

"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," says Matt Schulz, chief credit analyst at LendingTree. "Then, you factor in that many of us have spent far more time than usual inside, staring at screens over the past two years, and it makes sense that kids might have used cards without permission a bit more than before."

Kids and Credit Cards: Quick Tips
Building credit from a young age can be a smart move, as long as the card accounts are handled responsibly. Not every kid under 18 is mature enough to have a card in their name, notes Schulz, but there are some steps that you can take to ease them into the world of credit.

1. Start with a prepaid or debit card: Parents and guardians can monitor activity and use these cards as a jumping-off point for important money management conversations.
   
   
2. Make responsible teens an authorized user, and keep close tabs. Most card issuers let you track spending through apps, websites, text messages and more.  Take advantage of this technology, says Schulz. With a LendingTree account, cardholders can track spending across multiple credit cards with unlimited access to credit scores and reports. Bonus tip: If you're interested in building a child's credit early, but don't think they're ready, you don't have to actually give them the card, he adds.
   
   
3. Do a credit 101 lesson with your teen. Explaining how credit behavior can impact their credit score, and in turn, their ability to get a car loan or an apartment in the future is so important, says Schulz.
   
   
4. Look for cards suited for first-timers. Schulz recommends student credit cards, which are available once kids turn 18. A secured card can also be useful because it minimizes the risk involved for everyone.

To view the full report, visit: https://www.lendingtree.com/credit-cards/study/kids-and-credit-cards-survey/.

Methodology
LendingTree commissioned Qualtrics to conduct an online survey of 1,051 parents with children younger than 18, fielded Jan. 11-14, 2022. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.

About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student loans, insurance, credit cards and more. Through the LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. LendingTree proactively compares consumers' credit accounts against offers on our network and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree

MEDIA CONTACT:
Morgan Lanier
morgan@lendingtreenews.com

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SOURCE LendingTree

FAQ

What percentage of parents reported their child used their credit card without permission in 2022?

In 2022, 46% of parents reported their child used their credit or debit card without permission.

How much unauthorized spending do children average according to the LendingTree survey?

Children who spent without permission racked up more than $500 on average.

What are some common reasons kids spend their parent's credit cards without permission?

Common reasons include in-app purchases (28%), food delivery (16%), and purchases through voice-activated speakers (15%).

How has the rate of unauthorized spending by children changed since 2018?

The rate of unauthorized spending has increased from 29% in 2018 to 46% in 2022.

What is one of the main causes for increased unauthorized spending among children?

The ease of mobile payments, in-app purchases, and shared devices has contributed to increased unauthorized spending.