'WHY not?' This was the response of eight parents out of 40 polled, who said that in an increasingly cashless society, teenagers can be trained to use credit responsibly, starting with a credit card with a $500 limit.
After all, $500 is 'a small sum', said Mr Don Tan, 53, a businessman who gives his two teenage children $700 each in pocket money every month.
The credit card would be useful in case of an emergency or when the children are travelling overseas, said Ms Pauline Goh, a secretary in her 50s.
The new card appealed to 10 students who liked the convenience of being able to buy bigger-ticket items without having to lug wads of cash or waiting for their next allowance. They also expected the card to offer privileges or discounts at restaurants or shopping malls, which debit cards lack.
'If there were discounts at, say, HMV or McDonald's for the $500 credit card, that could be an incentive for me to apply for one,' said Ms Cherry Tan, 19.
'For every student there who defaults on a credit card payment, there are many more who are responsible borrowers.' - UNDERGRAD EDWIN LEE, on the no-minimum-income card situation in the US
'These kids would have a higher risk of default since they are clearly borrowing beyond their means.' - ENGINEER RICHARD TEO, who felt the $500 card could attract those who may not have enough in their savings accounts
The practice of offering credit cards with no minimum income requirement is already prevalent in the United States, said Mr Edwin Lee, 24, who is studying there. 'For every student there who defaults on a credit card payment, there are many more who are responsible borrowers,' he said.
Indeed, a Credit Bureau of Singapore study showed that the proportion of credit card holders here aged between 21 and 29 who missed at least one payment last year was 6.6 per cent, lower than the overall national average of 8.14 per cent.
Bankers also said that holders of the $500 card would have their spending monitored closely, and their cards would be blocked instantly if they did not pay up the minimum balance on time.
NO
GETTING a credit card with a $500 limit was a definite 'no go' for Glen Chew, 24, a student at the Singapore Management University (SMU).
'I prefer to spend within my means, especially since my parents are not well off,' he said. 'But I may be one of the minority among youths who think credit cards - even if they are capped with a $500 limit - encourage overspending habits.'
Mr Chew would have been surprised to find that he was one of 25 young people who said they were not keen on plastic. Many felt their needs were being met by debit or supplementary cards.
Parents also preferred their kids to use such cards as their spending could be tracked easily.
The $500 credit card, by contrast, may encourage 'irresponsible spending', said accountant Tan Lee Wen, 46.
Another parent, engineer Richard Teo, 48, felt the $500 card could attract mainly those who do not have a supplementary card and also may not have enough in their savings accounts.
'These kids would have a higher risk of default since they are clearly borrowing beyond their means,' he said.
Parents also voiced concerns that their children may get a black mark on their credit history if they were careless. IT executive Angie Fang, 51, said: 'My son can be quite a scatterbrain. What if he loses the card and forgets to cancel it for months, only to find a big bill?'
Mr Mohamed Salim, a financial adviser at First Principle Advisory and a father of three children, said young people need to be trained to spend within limits and 'to earn the money they spend'.
