News Column

Should Ambitious Youths Take Credit or Debit?

May 6, 2013

My son wants to use a credit card reader for his lawn-cutting job. Can he do that?

The popularity of credit card readers has exploded over the past few years, with entrepreneurs, small businesses and - yes - even enterprising youngsters figuring out a way to cash in on this latest technology.

Credit card readers like Square, PayAnywhere or GoPayment provide users with a small debit or credit card reader at no charge that plugs easily into a smartphone or iPad.

Users download a complementing app for their device and register their bank account, allowing them to accept credit card payments with a simple swipe on their smartphone or tablet. Payment is generally deposited the following business day.

While the reader is free, the charge to swipe is not. Most services charge between 2.5 to 3.5 percent of each transaction for each swipe.

Many folks would enjoy the ability to pay their baby sitter or lawn mower by credit. But before you agree, think about these factors.

Consider your teen's maturity

Consider whether he or she is responsible with money, has the attention to detail to keep track of funds and whether the teen can be trusted to use the device appropriately.

Some customers might not have cards

If teens are completing a transaction with an adult, the payer likely will have a credit or debit card. But kids who want to sell an old video game to a friend or peddle their crafty bracelets to school chums most likely won't have credit-card-holding customers.

Fees can be costly

It might feel good to sell that skateboard for $50, but make sure kids understand the cost of doing business. After those transaction fees, junior is only netting about $48 - and less in some cases. The same will go for baby sitting, selling candy bars, pet sitting or cutting lawns.

Legal ramifications are real

A quick swipe of someone else's credit card without permission might not seem like a big deal, but credit-card fraud is no laughing matter.

If your child uses someone else's credit card on the reader without permission, sells a bottle of beer from the fridge to a minor, bullies another child into swiping his or her card or sells prescription drugs or illegal drugs using a credit card reader, the actions can have lasting consequences.

Sharon Cindrich is a mother of two, a columnist and the author of "E-Parenting: Keeping Up With Your Tech-Savvy Kids" (Random House, 2007).

Source: Copyright Virginian - Pilot 2013

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