How to protect your credit card from small kids

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How young children can spend money on games, apps, and even YouTube, and what you can do to protect your wallet.

Letting your child play on your smartphone or tablet may be perfectly fine, but if you do, you need to know how a few taps can rack up huge expenses, even in kids’ apps that are technically free. Teenagers’ in-game purchases have made the news more than once, but even preschoolers can seriously dent a family’s financial well-being. Here’s how to guard against accidental spending by small children.

What are the risks?Very young children are unlikely to bet on e-sports or donate to streamers on YouTube or Twitch. Computers and game consoles, too, are usually the preserve of older kids. That said, a toddler can inadvertently drain your bank account by tapping a flashy banner in a cartoon, buying extra lives and equipment in games, or messing around in the settings.

Ads in cartoonsEven folks who don’t let their kids play games on their phone tend to let them watch the occasional kid-friendly cartoon on YouTube. It’s not hard to imagine how a small child might tap a brightly colored banner or ad that pops up during the video, but if that tap takes them to Google Play, the App Store, or an online shop, they can easily end up downloading a game or buying something.

They might also accidentally subscribe to YouTube Premium or another fee-based service. And spotting the problem won’t be easy; charges often begin only after a free trial period.

Mobile games and educational appsParadoxically, some seemingly harmless free-to-play games can empty your wallet even more comprehensively than paid ones. In the standard model, one of the most lucrative for developers, users get the game free but have to pay for additional options and virtual items. And if you believe that only a teen with a gambling addiction can spend a fabulous sum on a Sword of a Thousand Truths or some other gear, think again. Even a preliterate preschooler restricted to age-appropriate apps can severely deplete the family budget, never realizing they are spending real money.

Hard to believe? It’s happened plenty. For just a few examples, a Connecticut 6-year-old spent more than $16,000 playing games on his mom’s iPad, and a 7-year-old in the United Kingdom accidentally paid £1,200 ($1,700) on online games, including £800 ($1,100) on virtual cat food.

The preschooler mindsetYoungsters are very curious, especially when it comes to new gadgets. Most kids under the age of 5 have not yet learned to read properly, and so they find bright pictures far more attractive than words (as do some adults). Naturally, they tap banners without thinking about the consequences.

At that age, there is little point trying to explain the intricacies of the free-to-play model or the principles of online shopping — or that cartoon gems and treats in the fairy-tale world of games and videos cost real money in the real world. To prevent your little angel from bankrupting the family, you’ll have to limit purchases using technical means. Fortunately, almost all devices and services let you do that.

Precautionary measures

How does your kid get hold of a smartphone or tablet in the first place? The most obvious way is for you to give one to them. Many parents these days buy school-age kids a smartphone for keeping in touch, but for those who don’t, kids may simply borrow their parents’ gadgets, or grab one without asking. Here’s how to protect your bank account regardless.

If you give a child your gadget

Very few parents have never handed their tablet or smartphone to a child simply to get a moment’s peace, but many do so without considering the security implications. Depending on the age and responsibility level of the child in question, caregivers have a few good options:

• Enable purchase confirmation in Google Play or the equivalent setting in the App Store to prevent accidental spending by requiring a password or fingerprint verification for all transactions, including in-game purchases;
  
• Use guest mode if your phone supports it. Some Android smartphones let you add new users and switch between profiles. On iPhones and iPads, you can use Guided Access to prevent your child from accessing anything except the app you selected. This function also lets you block taps for the whole screen or parts of it, as well as temporarily disable the Home button;
  
• Turn on transaction notifications in your banking app to catch accidental purchases before it’s too late;
  
• Set a spending limit, if your child is old enough to make small purchases on their own. Many banks allow you to limit spending by category, such as video games;
  
• Consider a separate debit card that you can top up as needed. Some banks let you set up a special account from which to view and manage your child’s outlays, and some also offer kids’ versions of their banking apps, which may include budget-planning advice and options for parents to set up payments to children in exchange for completing tasks.
  

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