Credit Cards Online Information

Apparently I'm not the only person who thinks teenagers and credit cards don't mix.

In last week's column, I talked about a Junior Achievement survey in which 10.3 percent of all teens said they own credit cards. The number was higher -- 19.6 percent -- for teens 18 or older. Even scarier, the survey said 15.7 percent of teens who own credit cards make only the minimum payment due.

A reader named Jerry had an interesting e-mail response to those figures. The problem, he wrote, is responsibility.

"Too many kids drop the ball, and there are a great many bankruptcies that result," Jerry wrote. "They don't think anything of defaulting and/or doing a (bankruptcy). . . . Sit in a mall (which I've done a lot while I'm out shopping with my teenage daughter). Watch the age vs. sacks and packages ratio for a while. Yes, you're right, most of them are teenagers and younger twenty- somethings. Or parents with those children."

I've had similar thoughts while sitting in the mall. It seems all the people who are loaded down with bags are half my age or younger. And I often wonder how they could possibly have enough money to buy all of that stuff.

Jerry goes on to write: "I can think of two ways for this country to go bankrupt overnight. A catastrophic earthquake dropping the West Coast into the ocean -- the resulting insurance claims would be inconceivable. The other is all those young credit card holders (or even a reasonably high percentage of them) defaulting. If nothing else, you and I are going to be left holding the bag. If there is enough of them, it's going to be a mess.

"If I had my way, I wouldn't let anyone younger than 25 hold a credit card. That would make it a sufficiently exclusive club that kids would respect it more (I hope)."

I don't know if that would be the answer, Jerry, because I'm sure there are people in their 20s -- and some teenagers -- who are responsible with credit. There certainly are people in their 30s, 40s, 50s, 60s, 70s, etc., who are not.

I do, however, remain concerned about teenagers running up credit- card debt without understanding the ramifications of their actions. I guess it all gets back to the need for more financial education, both in schools and, especially, in the home. And I'm glad to see an increasing emphasis on that.

# posted by Medical Information : 4:55 AM