High School Student Credit Cards: The Good, The Bad, and The Ugly (Part 1 of a 2-part series)

Written by Mike Killian
Posted On: September 22, 2006

Age of Majority is considered "the year a person acquires all the rights and responsibilities of being an adult". In most states this is 18. For example, a teen cannot be drafted before age 18. Yet contrary to popular belief, an adolescent can have a credit card... BEFORE the Age of Majority!

The stats regarding high school card usage may surprise some. According to the JumpStart Coalition for Personal Financial Literacy, a nonprofit educational organization, nearly a third of high school seniors reported having a credit card of their own or one co-signed by a parent. Also, according to surveys conducted by nationally recognized credit expert Dr. Robert Manning, the number of incoming college freshmen with credit cards tripled between 1999 and 2002.

Dr. Manning is the Director of the Center for Consumer Financial Services at Rochester Institute of Technology. He is also author of Credit Card Nation and has testified before congressional hearings as a consumer advocate on issues related to credit and credit cards.

In a phone conversation, Dr. Manning offered some very revealing and even startling points.

"A credit card can be issued before the age of 18. A creditor simply cannot force a minor to pay the debt.

But in addition to normal consumer purchases, availability of the high school credit card can easily lead to issues of secrecy. An emergency room treatment to pump a stomach after a night of drinking can now be kept from a parent. A traffic ticket is paid by credit card and the parent never knows. All of these issues and more are easily handled with a credit card. So targeting the high school age consumer is not this societies only concern with younger credit card holders."

I also made contact with Laura Levine, who is the Executive Director JumpStart Coalition for Personal Financial Literacy. According to Laura,

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"In our 2006 Survey of Financial Literacy Among High School Students, 12.9 percent of the survey participants already had credit cards of their own. (We survey 12th graders, only, so a lot of them are already 18.) Fourteen-and-a-half percent said they used their parents' credit cards and 4.8 percent of them said they used both their own card and their parents' cards. Of the 5,775 students we surveyed, 67.7 said they did not yet use a credit card.

Although I personally believe that some companies are marketing a little too assertively to teenagers and I would prefer they didn't, I think it's more important and more effective to educate our young people about using credit cards wisely rather than to try to stop the marketers. Especially if we're talking about teens, they're just a few years from being able to get a credit card on their own anyway, so I'd rather see them be better prepared to handle it."

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I think Laura and Dr. Manning both make some very good points. Part 2 of this article series addresses how to best educate the future leaders of our country about credit cards. A lot is at stake here folks, not the least of which is the future success or failure of our nation.

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