HE was shocked when his 16-year-old son came home with a POSB debit card a month ago.

He had not given his consent.

Said Mr Samuel Owen, 54, who works in oil trading: “Some adults haven’t been able to exercise restraint over the use of credit cards. So how can we expect a 16-year-old to be any better?

“As his father, I should be the one to decide when and whether he should get a debit card and not the banks.”

A check with the three local banks – DBS Bank,UOB Bank and OCBC Bank – revealed that all issue debit cards to those 16and above.

None of the cards required the applicants to get prior consent from parents.

Mr Owen said just before Christmas last year, his son had applied for the POSB MasterCard Debit Card, which charges no annual fee for the first three years. He declined to let The New Paper speak to his son, who is a polytechnic student.

Other parents we spoke to were surprised that banks were offering such cards to the young.

Ms Cecilia Nathan, a housewife in her 40s who has two daughters, said: “I thought that as long as you are under 18, you will need parental consent before you signupfor these products.

“What is even more worrying is that the 16-year-old will not be able to understand all the terms and conditions of owning the debit card.”

Mr Owen said that certain clauses stated in the card’s terms and conditions have worried him further.

“There is a clause stating that the bank will allow the card to be overdrawn and will even charge an overdrawn fee. This already sounds like a credit card to me,” hesaid.

But when approached, the three banks said that debit cards are unlike credit cards and do not offer credit lines to customers.

Instead, debit cards are very similar to ATM cards and customers are limited in the ways that they can use them, they said.

That is, cardholders can only transact using their debit card if they have sufficient funds in their account. Clarifying the overdrawn clause that Mr Owen mentioned, a DBS spokesman said that the clause is found in most banks’ terms and conditions.

He said via e-mail: “The clause... gives the bank the discretion to allow the card account to be overdrawn. “This clause does not imply the extension of a credit line or facilities to the debit card holder.”

The New Paper understands from three banking professionals that allowing 16-year-olds to apply for a debit card follows the industry practice of allowing those above 16 to open a personal savings account without parental consent.

The account holder can ask for an ATM card and a debit card to be linked to his or her account.

Used for online purchases

The banks revealed that most of the debit cards – issued by Visa, MasterCard or others – can be used to go online and make purchases, as long as the merchant accepts either Visa or MasterCard.

Ms Lynn Gaspar, Head of Lifestyle Credit, OCBC Bank, added that the only difference between an ATM card and a debit card is that the debit card can also be used at merchant outlets where Visa or MasterCard is accepted.

He said: “Similar to an ATM card, the account holder is able to set a transaction limit on the debit card, to prevent abuse and misuse.”

While Mr Owen appreciates that debit cards are limited in their usage, he thinks that the potential for themto be misused by teenagers is very high.

“In a way, banks are opening up more avenues for kids to succumb to temptation,” he said.

“Most 16-year-olds love to go online and will undoubtedly be tempted to make purchases that they otherwise wouldn’t have been able to with a regular ATM card.”

A 19-year-old Indonesian student who wanted to be known only as Ti understands how hard it is to fight temptation.

The Indian Indonesian,who studies at SIMUniversity, said: “I am an impulse shopper. If I see something I like, I’ll grab it without much thought.” She said she is lucky that her parents have managed to control her.

“I have a credit card but I am not allowed to use it unless it is absolute necessary. If I was allowed to use it, I’ll buy a $4,000 Chanel bag that I have been eyeing for ages,” she said.

This article was first published in The New Paper.