Breaking News: Credit for tweens? Seriously?

Issuing credit for TWEENs? Really? Individuals in their mid-late twenties and thirties can barely manage credit, how can we trust tweens to do the same?

"Buy Now, Pay Later (Maybe with Your Allowance)", a New York Times article published on Friday, February 6th written by Randall Stross outlines a new type of "payment option for anyone without a credit card or a debit card, no matter how young, has just become available." It's name, "Kwedit Promises" issued by Kwedit.com. Kwedit is linked to the newest internet games, also referred to as "nurturing games". (Foo Pets and Puzzle Pirates, think FarmVille) Also, this is the first form of credit that doesn't require getting a parent's consent.

Online participants can "buy" goods and services to participate in their online game. The example from the article talks about buying Purina Puppy Chow for their virtual pet in Foo Pets, a $3 good in this case. Once a participant "buys" their good they have three options to pay it off:
1. Credit card or debit card
2. Cash sent in a mailer
3. 7-Elleven stores. Talk about new trends! "A user can print out a barcode and head to a 7-Eleven store, which will accept cash, scan the code and notify Kwedit that payment has been made. In the next three months, a Kwedit logo will join those for credit cards and other payment methods on the doors of all 7-Elevens, a company spokesman says."

Industry Trends on virtual goods via the New York Times
1. In 2008, $510 million was spent on virtual goods
2. In 2009, amount doubled and $1.03 billion was spent on virtual goods
3. Estimated that in 2010, $1.6 billion will be spent on virtual goods

Here's the scary part...the key demographic is girls ages 12 to 14. Scott Sorochak, Co-Founder of FooMojo, that operates Foo Pets said “so, long run, if Kwedit is successful, that becomes the de facto virtual credit score, like Experian’s and the other FICO scores.”

The next generation of kids are could potentially impact their credit score (for better or for worse) starting at twelve years old! The article suggests that "Kwedit is a way to become acquainted with credit early, while still on training wheels." I don't think that twelve year olds are ready for credit or responsible enough to understand it's potential impact on their future.

Click here to read the full article