Teens To Find Credit Cards Harder To Get

When the credit card bill goes live come February next year, teens are going to have a harder time to apply for a credit card. Traditionally, teens, especially those who are just starting out in college, have been able to get credit cards very easy. However, with the credit card bill in place, teens will find that getting a credit card is going to be much harder.

Credit card use among teenagers has long been an issue among credit card holder advocates. The effects of introducing teenagers to credit cards have been very well studied and the results have been very alarming.

The largest population of teenage credit card holders are college students. According to recent research, college students are already in over their heads in debt, a worrying problem considering that they don’t even have a proper income yet. A large number of college graduates are also graduating with large debts to their name. These debts will probably take several years to be paid off.

Credit card holder advocates see credit card companies as partly to blame for this worrying situation. Credit companies are very eager to market their business to teenagers, guessing rightly that this particular demographic are prone to making impulse buys and that credit card payments will be handled by the parents. This is why lobbying for the protection of teenage credit card holders was very strong when the credit card bill was still being debated.

The solution that the credit card bill offers for this particular problem is to require teenagers either to prove that they are earning enough income to merit a credit card, to complete a certified financial literacy course or to have a co-signer such as their parents or guardian.

The drafters of the credit card bill are hoping that these measures will ensure that credit card debt among teenagers will go into a decline. A reliable income source will help a teenager in meeting his or her monthly credit card bills. A financial literacy course will educate them on how to properly manage their credit cards. A co-signer will ensure that, should the teenager have problems with debt payment, the co-signer will be liable for it and will help the teenager pay the balance off.

The credit card bill is very popular among credit companies for obvious reasons. Teenagers are not very thrilled by it either and some parents are worried by the fact that being a co-signer automatically makes them liable for their teenager’s debts, a situation which could lead to financial disaster for them.

What the credit card bill will actually do to teen credit card holders is still up for debate and won’t be seen until next year. In the meantime, some teeners are doing their best to secure credit cards now, before the law tightens up the credit card market. Other teeners are smartening up and are instead aiming for secured credit cards or debit cards.

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