Teenagers And Their Credit Cards Essay

1185 words - 5 pages

Teenagers and their Credit Cards

 

      Availability of credit cards have left young people in debt.  College-age students and low-income consumers, typically deemed bad risks, are easy targets for credit card companies.  Credit card companies should not target college-age students and low-income consumers because of their lack of financial stability.  In 1996, twenty-something consumers owed an average of $2,400 on their credit cards, nearly triple what they owed in 1990, according to research by Claritas Inc., a marketing research firm in Virginia.  If, payments of  $75 were made monthly to pay off a $2,400 debt, it would take 3-1/2 years with a 16 percent-rate card, and you'd pay $ 750 in interest.     

 

"There's no question that young adults are the most heavily burdened by credit card debt," said Stephen Brobeck, executive director of the Consumer Federation of America.  Many will plunge into debt.  Many teens waste little time taking on debt after leaving home.  The number of 18 and 19 year olds with credit cards in their own name is climbing, according to Teenage Research Unlimited.  Of American teen between 18 and 20 years old, 41 percent have their own cards, compared with 36 percent last year.

 

      Across all age groups, the statistics don't paint a pretty picture.  Bankruptcy fillings in the United States have more than doubled in the last decade, from 530, 436 in 1986 to 1.2 million last years.  Americans owe $ 484.6 billion in credit card debit, up from $ 437.9 billion in 1996, according to the Federal Reserve Board.  That National Foundation for Consumer credit, with 1, 300 offices nationwide, helped 1.3 million consumers last year pay off debt, a 20 percent increase over 1995. 

 

      Most students don't realize the hole they are digging during college but realize it when credit reports are pulled for job applications or when they try to purchase a home or car.  The problem starts when a teen gets a credit card with a parent as a co-signer.  That allows the teen to build a good credit history, so that by the time he or she graduates and gets a job, credit card approval is no problem.  Many teens become overextended and eventually find themselves with poor credit.

 

      More parents than ever are sending their teenagers to shopping malls and movie theaters with a piece of plastic instead of pocket change.  "Marketing to students is definitely working, as many of them end up signing for as many as five to six credit cards," say Don Blandin, president of the American Savings Education Counsel (ASEC).  A 1999 survey by ASEC found that 55% of all college students and 7% of high school students have a major credit card.  And nearly a third do not pay their bills in full...

Find Another Essay On Teenagers and their Credit Cards

Persuading Students to Use Credit Cards and Financial Aid Responsibly

1240 words - 5 pages Consolidation at the soonest possible time. Persuading Students to Use Credit Cards and Financial Aid Responsibly Do Students at Broward College Realize They are Incurring Credit Card and Financial Aid Debts? Broward University has a fast growing population of college students, all of whom seek to complete their college education based on a combination of their parent's educational fund that was set aside for them, and student loans paired

The Pros and Cons of Using Credit Cards and Debit Cards

3688 words - 15 pages Advantages and Disadvantages of Using Credit Cards and Debit Cards Today, almost everyone has their credit cards or debit cards. It can be used in the malls, shopping online, buying tickets, and much more. Most of the time, people use it because it is more convenient because you do not have to bring cash which could be easily stolen and used; unlike cards where there would still be a number of security features. There are two types of

Societal Impacts of Implementing Chip Technology in Credit and Debit Cards

1721 words - 7 pages years of facing huge losses on account credit card frauds and identity thefts a number of big banks and businesses in USA have started aligning them with the urgency of implementing chip technology in credit and debit cards. The need to implement chip technology is today deeply felt in US market for making data storage and data transfers more secure (Douglas King, 2014) Due to their obligations companies are now aligning them self with the urgency

Yes or no to a credit card?

957 words - 4 pages use, the reasons are particularly understood; for college students, credit cards are their only means for paying for their education”. The Card Act helps guide students in campus and informing them about the agreements of the card and preparing them to get financial experience. Some individuals agree that college students are applying for a credit card at a young age and getting in debt early. Even though college is a place where teenagers come to

Marketing Analysis for Visa

3887 words - 16 pages competitors.* Improvement of technology reduces the cost of producing a credit card equipped with more level of protections.* Governments in some countries begin to recognise the ability of payment cards to facilitate economic growth. As a result, they are taking steps to reduce their reliance on the cash.Threats* There is a new trend for big retailers to provide credit card services. For example: Marks and Spencer, Sainsbury* MasterCard is

Credit Cards: Worth the Risk?

721 words - 3 pages While a credit card is defined as a plastic card having a magnetic strip, issued by a bank or business authorizing the holder to buy goods or services on credit, the definition alone says little about the advantages and drawbacks of the cards themselves. Useful for individuals such as college students in paying for expenses, credit cards are a convenient tool when used properly and responsibly.. However, if abused credit cards also have their

Discussing the Credit Card Debt Crisis

3403 words - 14 pages allowed to seek business on campus at some institutions, student groups may sponsor credit card companies who wish to solicit applications. Both sides appear to benefit from this arrangement. The student group receives a set dollar amount for each application received, and the company is able to set up a table one day a week in the student union. Norvilitis also say that most card companies are starting to advertise their cards to students as a way

Credit Card Marketing on College Campuses

584 words - 2 pages the 2003 average of $7,831 (Nellie Mae, 2007). This shows the trend that students are graduating with more debt than just their student loans. Students should not be worrying about any other debt after graduating. With credit card companies preying on students on campus, students will get these credit cards and ruin their financial future after college. Students which are 4 year undergraduates that borrow to pay their education, graduate with

The Convenience of Credit Cards

911 words - 4 pages students apply for a credit card as a way to have extra spending money, without realizing that the money has to be repaid. Students should have an income in order to repay their credit card purchases. Unfortunately, many students do not pay off their cards, and therefore incur large amounts of debt. Student credit cards are more likely to have higher interest rates than others’ cards due to the lower credit scores students usually have. The

Credit Cards For The Young A Boon Or A Bane:

961 words - 4 pages on campus 4.Colleges to offer budgeting and financial responsibility classes and seminars E.Conclusion 1.Restatement of thesis 2.Credit Card for students bane or boon is determined by the level of maturity of the students Credit Cards for the Young A Bane or a Boon?: A Study of Student Indebtedness to the Credit Card Companies Major and minor credit card companies have targeted a new market of borrowers to boost their bottom line "" high and

Cash Versus Credit

852 words - 3 pages companies fail to mention when they lure they’re customers in is the fact that there is a lot of risks and fees involved with credit cards. One of the major risks involved with using a credit card is identity theft. All it takes for one to steal another’s identity is their name and a credit card number; identity theft is just that simple. Another risk of using credit cards is the interest the credit card companies put on purchases using credit cards

Similar Essays

Credit Cards: A Blessing And A Curse

1902 words - 8 pages positive and negative issues regarding credit cards. A credit card can be seen as both a blessing and a curse, depending on how you use it. It is a wonderful asset to those who want to be prepared for emergencies, establish a good line of credit, or have a convenient way to pay while traveling. However, it can be a burden to those who spend beyond their means, don’t pay their bills, or are victims of identity theft. The bottom line is that a credit

Credit Cards And The Foreclosure Crisis

1535 words - 6 pages seen it personally with my parents, their interest’s rates have all gone up. Real credit cards, not debit with a credit logo, are a huge responsibility, which many people have proven they cannot handle. If a million teens default on a $500 payment at 22% interest, which is $610,000,000 that is put off onto the credit industry this in turn puts pressure on both the market and the companies taking the debt. This process started the national

Credit Cards : Liberty And Debt, For All

639 words - 3 pages this country that can contribute to this wealth of unhappiness such as credit card abuse, excessive gambling, and lack of financial literacy.The recent inclination of credit card issue and use would most likely receive the most blame for financial failure. The average household credit card debt for Americans ranges from $8,000 to $14,500 , but can be as high as $30,000. One of the main problems with credit cards is that they can be as addictive

Credit And Debit Cards Vs. Cash

711 words - 3 pages Over the last ten years people in the United State and around the world have heavily relied more on their debit or credit cards to process transactions of their purchases. In the old days it used to be when you would get your paycheck on Friday and rush to the bank during your break or lunch in order to cash withdraw your funds or deposit them into your account. It used to be where you carry cash to buy groceries, pay bills, and go shopping