Youth and bad credit

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  • #10740

    Mike
    Participant

    I work in the financial industry as a loan officer. Over the past few years I’ve noticed a trend among younger people: they don’t seem to care one bit about their credit. It is very rare that I see a good credit report for anyone under 30. Most have over-extended themselves to the point of bankruptcy, maxing out more credit cards than they could ever handle. They gladly accept extremely high-interest credit cards and auto loans from lenders who fully expect them to go into default. I am interested in hearing from those under 30 about why this is the case, and if they realize the problems they are causing themselves in the future when it comes time to buy a home.

    User Detail :  

    Name : Mike, Gender : M, Sexual Orientation : Gay, Race : White/Caucasian, Religion : Agnostic, Age : 42, City : Ben Lomand, State : CA Country : United States, Education level : Over 4 Years of College, Social class : Upper middle class, 
    #30630

    Johnna
    Participant

    I think two factors contribute to the problem of young people with poor credit. The first is that it is so easy to get credit now. From the moment you begin college, you start getting credit card offers in the mail and by phone. I would assume that people who aren’t college students get the same offers. There are also sales reps all over college campuses the first week of school trying to get students to fill out card applications in exchange for free gifts (t-shirts, cups, etc). Of course, no one has to accept the credit cards, but most do because of the second factor: a lack of financial education. The credit card companies certainly aren’t going to go into detail about the dangers of credit; you’re lucky if you get a brochure warning you not to use the card too much. Most parents don’t discuss money with their children. Financial education isn’t offered in most American schools, so young people don’t understand things like APRs and finance charges. They certainly don’t understand that having bad credit can negatively affect your ability to purchase a house in the future, especially since most young people don’t think that far ahead.

    I wish that financial education were a required part of the curriculum in American high schools. Personally, it would have been a lot more useful than some of the things I learned and have since forgotten.

    User Detail :  

    Name : Johnna, Gender : F, Race : Black/African American, Age : 27, City : Montgomery, State : AL Country : United States, Occupation : Librarian, Education level : Over 4 Years of College, 
    #27721

    Marian
    Member

    Johnna made some very good points. I would also like to add that alot of the people who are currently between 18-25 grew up in a very prosperous age..meaning the 90s. Alot of us were able to buy things because our parents could afford giving $100 allowances a week. I simply assessed that from observing all the students I went to school with in Junior High and High School. I was not that lucky, I worked at the age of 8 until now, at the age of 20. I understand the value of money, and how fast it can go. People will spend the way they are accustomed to until something dire happens, like they go bankrupt. Then they suddenly think it’s not their fault, that someone else can just fix it all (i.e. Mommy + Daddy). The best way is education…parents must teach the value of money to their kids at an early age. Also, parents should keep tabs on their children’s credit cards, especially those in college. I believe there is a kind of program at banks, they will give your child a credit card, but the parent would be the one to supervise it or something (maybe they get a transactions history every month?). I don’t have that on my credit card, but I am very disciplined, and I always pay off the entire balance when i get my bill. Education is the key, as well as practice. Your kids may hate you for awhile, but they will appreciate it later.

    User Detail :  

    Name : Marian, Gender : F, Sexual Orientation : Straight, Race : Asian, Age : 20, City : westchester, State : NY Country : United States, Occupation : student, Education level : 2 Years of College, Social class : Middle class, 
    #13846

    greg21548
    Participant

    I feel many kids are not educated on finanices. I feel that they have been given money from their parents theur whole life that when they get a credit card they just continue spending their money the same way. I think that their should be mandatory classes in schools senior year so teens and young adults can learn how to manage their credit and other aspects of of finances.

    User Detail :  

    Name : greg21548, Gender : M, Sexual Orientation : Straight, Race : White/Caucasian, Religion : Catholic, Age : 18, City : plainview, State : NY Country : United States, Occupation : student, Education level : 4 Years of College, 
    #25178

    Autumn
    Member

    I can speak from experience when I say credit cards have been the worst thing to happen in my life. I’m 25 now and am in so much credit card debt. When I got my first card I was only 17. I went to college and it was offered to me. How wonderful it was to have the freedom to buy what I needed and wanted. Then came the bill. I had no idea how I was going to pay for it. So I paid the minimum payment each month. I was sinking deeper and deeper into the interest pit. Then I got an offer for another credit card that would put the first one on it and then I could have lower interest payments. Well after 6 months that longer was true. It just got worse and worse from there. If someone would have informed me then what I was doing I would have never gotten myself into this mess. Now my credit is destroyed and I’m stuck paying an enormous amount of money each month just so the phone calls form the rude credit collecters will stop coming in. All I needed was the education and information of what I should not have been doing with my credit. Now it’s too late and I may never have all the things I’ve dreamed of.

    User Detail :  

    Name : Autumn, Gender : F, Sexual Orientation : Straight, Race : White/Caucasian, Religion : Christian, Age : 25, City : Asheville, State : NC Country : United States, Occupation : Student, Education level : 4 Years of College, Social class : Middle class, 
    #37671

    Heather
    Member

    I received my first credit card when I was 16. It was for Fashion Bug and had a limit of 250. (I was working) Then I got Sears at 18. From then on I didn’t get another until I was 24. I was lucky enough to have a teacher tell me one time that you should NEVER buy anything on credit that you wouldn’t buy if you had the cash in your hand. Also, I learned about interest rates and how to ‘play’ the credit card game from a guy at work. Basically I wait until one comes in with 0Apr and no transfer rate…. keep switching them around. But I have never been in debt with them until now…. just bought a 4000 vinyl fence. Fortunately I already had bought my house. Really, though, I think there should be some kind of mandatory class before getting credit cards because I don’t think that many young people really understand it all.

    User Detail :  

    Name : Heather, Gender : F, Sexual Orientation : Straight, Race : White/Caucasian, Religion : believe in a few different things, Age : 26, City : Turner, State : IL Country : United States, Education level : High School Diploma, Social class : Middle class, 
    #18439

    alex
    Member

    I think the problem lies with Credit Card Companies dishing out the cards so freely to people under 30…and what is the average age for the people to work at these credit card companies? over 30 im sure…

    User Detail :  

    Name : alex, Gender : F, Race : *poweRpuFF greeN*, Age : 19, City : houston, State : TX Country : United States, Occupation : *maDsCienTist*, 
    #43720

    Topramen
    Member

    Hi, I am young, in college, and my credit probably stinks. I am over $25,000.00 in debt. But I am not completely ignorant as far as my finances go, either. I have taken both finance and accounting classes, and understand how APRs, compounded interest, amortization, stocks, etc. works, I even use my financial calculator to figure out how much I need to pay per month to have all my bills paid off in ‘N’ number of years. I think that most of us young people think that all of our debt will somehow go away and solve itself, like it’s not real or something, and that they’ll deal with it later. Perhaps the reason people in the say, 18-24 age range are in such a jam is because a lot of us have parents who are educated, make a lot of money, and give us everything we’ve ever wanted, even without us having to ask for it. Most of us were little kids in the decadent ’80s, and teenagers in the high-tech, nasdaq-inflating ’90s. We didn’t have to experience a major Depression like our grandparents did, or money-depleting wars like our parents did, so we were not raised with that penny-pinching mentality-or much spendinging willpower, for that matter. Also, look at media like MTV, where all those flashy videos just glorify spending.

    User Detail :  

    Name : Topramen, Gender : F, Sexual Orientation : Straight, Race : Asian, Religion : Agnostic, Age : 23, City : San Francisco, State : CA Country : United States, Occupation : Office Manager, Education level : 4 Years of College, Social class : Upper middle class, 
    #38669

    Sonja
    Member

    I am a person who has dealt w/bad credit in the past. Although I decided to clean it up before it got too far out of control, it just didn’t seem to matter. Even after I cleaned it up, I had a hard time renting, buying, and even opening up a bank account. That was about six years ago, and I still have the same problem w/lenders telling me how my credit showed some things from the past. Asking me if I knew someone who would co-sign for me. What was the purpose of me spending money and making super sacrifices to clean up my credit LIKE EVERYONE SUGGEST if I still have to deal with the words YOU WERE NOT APPROVED! And whats the purpose of waiting 7 years before things will be completely removed?

    User Detail :  

    Name : Sonja, Gender : F, Sexual Orientation : Straight, Race : Black/African American, Religion : Christian, Age : 27, City : Chicago, State : IL Country : United States, Occupation : nurse, Education level : 4 Years of College, Social class : Middle class, 
    #18194

    I’m 19 and I have 2 credit cards. I remember my first day of college walking into the main hall and there were actually desks lined up down the hall with credit card reps sitting there trying to get students to apply for a Student Visa or anyone of the other credits available. To put it bluntly they push and push telling you oh its great and its blah blah blah. Anyway its like horrible peer pressure cause they sit there and tell you they’re your friends but in all aspect they’re just trying to make money. In my opinion the reason people under 30 have bad credit or an excessive amount of credit cards is because they are easier to acquire than anything else and the whole idea of ‘paying’ for something right now and just paying the bill at the end of month is more convenient. A friend of my brother who is 13 acquired 12 credit cards online, they were shipped to him and he ran up several thousand dollars up in charges. He did all this without his parents ever finding out and since he was under 18 the court couldnt order him to pay the charges from each card. Now i would like to know how credit card companies can sit there and say the credit is bad and that we as an age group is irresponsible. If there is anyone to blame its the companies for one they give out cards out like candy and promote this false sense of security to unsuspecting people.

    User Detail :  

    Name : Robert Hebert, Gender : M, Sexual Orientation : Straight, Race : White/Caucasian, Religion : Christian, Age : 19, City : Orange, State : TX Country : United States, Occupation : Pharmaceutical Med Student, Education level : 2 Years of College, Social class : Upper class, 
    #40809

    Jennifer31065
    Participant

    If jobs paid enough to live on, there would be no reason for someone that young to be indebted. I live in the bankruptcy capital of the country, and rarely see anyone (especially single females) who has not declared bankruptcy at some point. These include individuals who are thrifty and responsible. It is quite hard to find a job that pays enough without a college education, and impossible for someone like me to get an education without incurring more debt. I received my first credit card at age 18, while making minimum wage, and quickly maxed it out on necessary living expenses; nothing superfluous. A university student can easily get a credit card, regardless of their credit history and present salary. The university I attended had many of its school brochures and booklets sponsored solely by credit card companies. Americans are not as rich as we appear. We simply have more access to credit.

    User Detail :  

    Name : Jennifer31065, Gender : F, Sexual Orientation : Straight, Disability : Mental, Race : White/Caucasian, Religion : Agnostic, Age : 26, City : Memphis, State : TN Country : United States, Occupation : Student, Education level : 4 Years of College, Social class : Lower middle class, 
    #43184

    Matt
    Member

    I am 24, but have managed to maintain a credit rating good enough that I was able to buy a house within a year of getting my first job. Ok, so some of the cash for the down payment was a gift from my parents, but my credit rating was good enough that I didn’t get gouged on the interest rate. My parents managed to teach me good money management principles – pay off your credit cards as soon as the bill comes in, and if you can’t afford to pay cash for something besides a house, you can’t afford it. I’ve mostly stuck to those rules, except for financing a truck when I had landed my first job out of college and the K-car that had got me through college was about to fall apart. However, we either learn through instruction or experience, and people my age are usually lacking the latter. If their parents didn’t teach good money management principles, they may take some time to learn them. If they ever do.

    User Detail :  

    Name : Matt, Gender : M, Sexual Orientation : Straight, Race : White/Caucasian, Religion : Christian, Age : 25, City : Oxford, State : GA Country : United States, Occupation : Engineer, Education level : 4 Years of College, Social class : Middle class, 
    #24619

    Natalie20079
    Participant

    I asked my father one day if I should get a credit card and he had told me that I shouldn’t get one. I wish I had of listened to him because know I owe over two thousand dollars worth of bills or more. I think us younger people don’t really know what we are getting into when we accept these cards. After I have paid the bills off I don’t want know more credit. Though everything is based on credti know a days. I wish cash was still in style.

    User Detail :  

    Name : Natalie20079, Gender : F, Sexual Orientation : Straight, Race : Black/African American, Religion : Methodist, Age : 24, City : Baltimore, State : MD Country : United States, Education level : 2 Years of College, Social class : Lower middle class, 
    #29331

    Janelle
    Member

    You’re right, credit cards are far too easy to get, and far too easy to use. I’ve never owned one myself, but my boyfriend has one that’s maxed out. (he went to Florida for a Tae-Kwon Do tournamnet). Thre’s many reasons we have bad credit. I myself made the mistake of letting my dad handle all my finances until recently. I got a call from a collection agency saying I hadn’t paid a dentist bill from 2 years ago! I had no idea. I also think the real reason we spend money so fruitlessly is that we were never taught about budgets etc. I know my parents never taught me anything about how to save money, and in school there were no finance classes available. Only once a person moves out on their own do they realize how much money it takes to just afford rent every month. Low paying jobs, student loans, credit cards. It all adds up in the end.

    User Detail :  

    Name : Janelle, Gender : F, Sexual Orientation : Straight, Race : White/Caucasian, Age : 19, City : Regina, State : NA Country : Canada, Education level : Technical School, 
    #23161

    Jocelyn30573
    Participant

    I’m 26 and my while my credit isn’t dismal, it certainly isn’t perfect either. I have several credit cards that while not maxed, at least have a very substantial total balance. I can only speak for my own situation, but having grown up in the electronic age, most of my bills are electronically debited from my checking account. My paycheck is electronically put in, most of my bills are electronically taken out. For these bills, everything is just grand. I never missed a payment on my first car (payed on it for about 3.5 years) and haven’t missed a payment on my college loans (have been paying on them for several years now). However, the credit card companies have been very slow to move into the electronic age. While some of them had an electronic payment option on the website, they didn’t have an auto-debit program. Which means I simply forgot to log in by the due date and make a payment (which I realize is irrisponsible on my part). My credit is slowly improving now that most of my credit cards have an auto-debit program. I hope to have most of the damage repaired by the time I’m 30.

    User Detail :  

    Name : Jocelyn30573, Gender : F, Sexual Orientation : Straight, Race : White/Caucasian, Religion : Taoist, Age : 26, City : Roanoke, State : VA Country : United States, Occupation : artist, Education level : 2 Years of College, Social class : Middle class, 
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