High School Student Credit Cards: The Good, The Bad, and The Ugly (Part 1 of a 2-part series)
By Mike Killian, CardRatings.com Debt/Credit Management Reporter
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.
Approximately 1/3 and possibly as much of 40% of all High School Seniors AND Juniors have a credit card today. Possession of a credit card has been a simple migration from older brothers and sisters in college to younger siblings in high school and the advertiser naturally follows this migration.
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,
We welcome your comments about credit card and other money issues in our popular credit forum!
Mike Killian has been writing about credit and debt management issues that are of importance to consumers for over 8 years. His articles have been referenced by various members of the media, including MSNBC and The Motley Fool. Mike has also offered debt elimination seminars to businesses and community colleges for many years.
Mike offers free consumer advice on the CardRatings.com Credit Forum as well as on his own site, FreeMoneyTraining.com. While at his site, you can view additional articles as well as his schedule of upcoming seminars.
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
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.
Approximately 1/3 and possibly as much of 40% of all High School Seniors AND Juniors have a credit card today. Possession of a credit card has been a simple migration from older brothers and sisters in college to younger siblings in high school and the advertiser naturally follows this migration.
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,
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."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."
We welcome your comments about credit card and other money issues in our popular credit forum!
Mike Killian has been writing about credit and debt management issues that are of importance to consumers for over 8 years. His articles have been referenced by various members of the media, including MSNBC and The Motley Fool. Mike has also offered debt elimination seminars to businesses and community colleges for many years.
Mike offers free consumer advice on the CardRatings.com Credit Forum as well as on his own site, FreeMoneyTraining.com. While at his site, you can view additional articles as well as his schedule of upcoming seminars.
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
posted by CardRatings.com at 6:00 AM
<< Home