In the United States, having a good credit history is essential to qualify for student loans, among other things. According to the Credit Card Act of 2009, young people over 18 can apply for their own credit card, provided they can prove their own income or have a co-signer. Starting at age 21, these requirements will be waived, making access to credit even easier.
The advantages of starting early can range from building a track record early on, enabling you to speak to the strength of your banking health in the future, to obtaining better rates on loans, including mortgages, and learning how to use credit cards responsibly from a young age. Familiarity with the banking system is practically essential for adulthood, when the leap from student to worker is almost like leaping into the abyss. It happens suddenly and often without warning.
Here is a risk of fraud or identity theft if the necessary precautions are not taken
On the other hand, starting so young and without supervision could lead to misuse of cards and damage the credit history of both the person concerned and whoever is their guarantor. In addition, there is a risk of fraud or identity theft if the necessary precautions are not taken, especially when it comes to online purchases. And today, it’s common knowledge that online shopping is very common. Shopping has become an everyday activity; not carrying cash is almost the norm. This has meant that what used to take time is now simply picking up a cell phone, visiting a website, choosing the desired item, clicking “Buy,” and paying directly with Apple Pay. Immediacy, as with many things, also has its drawbacks.
This option allows young people to begin building a credit history
For those under 18, there is another option: being added as an authorized user on an adult’s credit card. This option allows young people to begin building a credit history through the cardholder’s good use of the card.
The total amount of severely delinquent credit card debt increased to 10.7%
In any case, it’s important to keep in mind that it’s easy to fall into debt, especially at these ages. Failure to do so responsibly ends up causing delinquency among young people, especially those 35 and older, according to recent studies. The total amount of severely delinquent credit card debt, defined as being more than 90 days past due, increased to 10.7% during the first quarter of 2024, according to the Federal Reserve Bank of New York. The previous year, only 8.2% of credit card debt was seriously delinquent.
Children reflect what they see, not what they are told
Fintelhub (financial intelligence website) emphasizes that the first step in supporting children’s financial education is for parents to educate themselves first. Children reflect what they see, not what they are told, so it’s vital for adults to understand key concepts such as managing payment deadlines, minimum payments, accrued interest, and the impact of spending on credit scores.
Of course, this news is especially relevant in a country like the United States, where credit is a part of everyday life. But it’s also important to emphasize the fact that having a foundation and support from family and finances is almost essential to avoid misuse. At the end of the day, a credit card is easily used, and that’s precisely what can lead to misuse. Because just as it’s easy to use, it’s not so easy to pay it off. Therefore, we can always use it responsibly and ensure that credit works in our favor, not the other way around.
