Newspaper article The Evening Standard (London, England)
Now Barclays Wants to Give Children Credit Cards
Byline: JO REVILL
THE head of Barclays has revealed that the bank is keen to extend credit cards to children - despite fears that it could land youngsters with thousands of pounds of debt.
Chief executive Matthew Barratt told a committee of MPs today: "The net present value of the baby in the cradle is quite attractive."
Asked whether it would be a good idea to offer credit cards to young people, who might not understand the financial implications, Mr Barratt said he wanted to provide "low-level credit card capability" on a "controlled basis". He did, however, admit: "It is a safety issue. You would exclude anyone without the ability to pay ... you would have to be very careful."
But he added: "We are interested in the youth market. If you can recruit the whole family, it is very attractive."
Mr Barratt, an outspoken American, directly contradicted Fred Goodwin, Goodwin, chief executive of the Royal Bank of Scotland group, who said: "It doesn't make any sense to advance credit to any group of young people where there is a high level of credit risk."
Reacting to the proposals, a spokesman for the National Union of Students said that many students were arriving at further education establishments where they would get into debt through student loans. To suggest that they should arrive at the age of 18 carrying a debt burden from banks willing to extend credit cards to teenagers was ridiculous.
The Children's Society said they planned to look into the matter and would issue a statement once they had read the details. Initially they expressed outrage at the idea.
The remarks were made as the heads of Britain's big four banks gave evidence to the Treasury Select Committee, investigating whether the banks had made excessive profits from small and medium-sized businesses. …