The Senate version of a bill forcing credit card issuers to adopt more consumer-friendly terms was approved today, 90-5. According to the New York Times account of the debate on the Senate floor yesterday, Sen. Byron L. Dorgan, D-N.D., criticized a marketing pitch by a major issuer for a "Hello Kitty" credit card aimed at children 10 to 14 years of age, saying, "I'd just love to know the person who thought this up and to say, 'Are you nuts? What on earth are credit companies doing soliciting young kids to get a credit card?' "
We can provide at least a partial answer to Dorgan's question. Back in June 2005, Consumer Reports Money Adviser singled out the Hello Kitty Debit MasterCard as a card that was being promoted as teaching kids age 10 to 15 to "learn great money-management skills," while at the same time delivering a companion message to spend, spend spend. The website promoting the card urged young cardholders to "shop 'til you drop," and the iconic kitty pictured on the card was decked out for a spree, purse at the ready. The pre-paid card also was loaded with hefty fees--another real-world lesson about using plastic.
We asked Peter Klamka, president of Legend Credit, the company that developed the Hello Kitty card, about the marketing logic behind the card. "If one teenager gets the card, then others see it and want one too," he said. "There's a whole Hello Kitty culture that's kind of like Nascar for young women."
Fortunately, the version of credit card reform legislation approved today aims to protect consumers under age 21 from getting deluged with unsolicited credit card offers. The bill would require an over-21 co-signer or proof of an independent means of repayment for any new cardholder in the under-21 crowd.
President Obama, who has publicly called for an end to card practices such as "anytime, any-reason rate hikes" has asked that the House and Senate agree on a final version of a credit card reform bill for him to sign into law by the end of May.--Andrea Rock