Credit Card Companies getting Young People Hooked on the Plastic

by Mike Bevel, CollectionIndustry.com

Sometimes even before they get the directions to their first weekend kegger, high school seniors are being tempted to the wild side of credit card debt. The teens are a tantalizing market for credit card issuers, since teens usually have a pretty hefty disposable income, and not a lot of financial responsibilities on their plate.

That is, until teens get hold of that first cool, shiny Visa.

Consumers 18-25 have been dubbed Generation P ? for plastic (not poor choices or PhD or PUT DOWN THAT CREDIT CARD) and they are the Holy Grail of card issuers. Along with the aforementioned access to disposable income, some industry watchdogs also argue that, with little real-life credit experience, Generation P is also attractive because they rack up debt so quickly. According to a recent survey, nearly 1 in 5 in that Generation P range have a credit card.

“Until you learn how to manage cash, you’re not likely to learn how to manage plastic,” Jean Ann Fox, director of consumer protection for the Consumer Federation of America, told the Detroit Free Press.

Credit card issuers see this as an opportunity to open dialogue between parents and teens, rather than an avenue to increased revenue based on finance charges. “There’s got to be a great level of conversation between the parent and the child,” said Donovan Shand, vice president of retail product management for Comerica Bank in Detroit.

Teens now can find a whole boutique?s-full of credit card tailored to their spending whims. While most have a $300 to $500 limit, some go as high as $2,000. And they don?t even really have to say ?please.? “We’re not aggressively marketing these cards directly to the student population,” Shand has said. Though with Joe Camel currently out of work for the foreseeable ever, who knows.