Are kids conditioned to spend with plastic?

Earlier this month on BloggingStocks, I expressed my support for the idea of credit cards for teenagers. I quoted respected personal finance guru Laura Rowley, who wrote this about the credit card industry: "I think those companies are a potentially dangerous enemy, and you have to prepare your child to be a worthy opponent in battle. You want them to conquer this prospective foe, and transform it into a humble servant that does their bidding."

This weekend, The New York Times took the opposite perspective. The piece talks about the cards that are a "hybrid" of credit cards -- Visa gift cards that can be used anywhere Visa is accepted for example. The piece quotes several experts who don't think these products are good for kids. The theory is that kids don't really understand how plastic works, and that they need the feeling of cold hard cash passing from their hands in order to understand the seriousness of money.

According to The Times, these cards "encourage youngsters to assume that money always comes in plastic and that they should spend whatever is on their cards because that's why the cards are there."

But that's where parents should come in. These hybrid cards provide a set of training wheels for kids to learn about how charging purchases works -- in a fail-soft, supervised environment. And consumer credit is a fact of life. With all the benefits that can come from the responsible (i.e., paying it off every month) use of credit -- convenience, frequent flyer miles, etc. -- avoiding plastic is just not intelligent or realistic.

Parents can use these cards to help their kids learn, and that's exactly what they should do. It's all part of transforming the industry into a "humble servant" that can do your child's bidding.