Too Easy to Get a Credit Card?
New research has found that almost a quarter of Australians have signed up to a credit card as a teenager. The accessible nature of attaining your own credit card has fuelled warning that without the right education or guidance, this could easily lead to a debt spiral in the future.
Data from finder.com.au (an online comparison site) has found that 17% of 18 year olds already own a credit card. 19 year olds have a percentage of 23% when it comes to owning a credit card. The survey shows that by the age of 25, more than 55% of respondents have indicated to owning their own credit card.
The Popularity Of Student Credit Cards
The appeal of having a credit card is easy to see from a young adult’s perspective. It is easy to cover everyday expenses, as well as financing overseas trips, rent, medical expenses, as well as studying costs through credit. The ease of access to signing up has led to an increased amount of young adult signing up for their own credit cards, as indicated by the statistics on finder.com.au.
Australian law states that individuals must be 18 years of age before they can take out a credit card account. Banks are able to target young adults through specially designed student credit cards, primarily aimed at university students. Some institutions boast an approval rate of 60 seconds, suggesting that there is no thorough process in determining the accountability of the person applying for the credit card.
A well-documented case study was published through the Sydney Morning Herald earlier this year – a story following a 20 year old student on youth allowance, who was approved to own a credit card by her bank. This article examined a larger underlying issue presented in student credit cards. Generally, students are usually only working at a casual and contractual basis, meaning there is no guaranteed income to ensure they pay off the debt.
Educating Children About Money
This news serves as warning to a lot of Australian households – it’s important to educate children about money, and help them avoid getting into debt. There are significant implications associated with a damaged credit history, such as the inability to apply for a mortgage or loan when the time comes. In regards to guidance, you can teach children so they learn what ‘credit’ means, and help them understand how to use a budget or planner. Of course, the importance of saving should be taught from an early age, in order to help build a solid financial history.
There is Always Help Available
If you are struggling with debt, you can always talk to our professional team at Debt Fix. We’ve had success with a lot Australian families and individuals, and no matter how bad the problem may seem, we can always give you a helping hand. Contact us today by giving us a call or sending us a message.
