This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Many young adults handle credit well -- but will yours?

When Congress enacted the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 -- which made it illegal to issue a credit card to anyone under the age of 21 without a job or co-signer -- the assumption seemed to be that young adults are less capable of handling credit than their elders. But a recent study by researchers at the Federal Reserve Bank of Richmond and the University of Arizona suggests that assumption may need re-examining.

The study found that people under age 21 are actually better at managing their credit in some ways than older groups of borrowers. The study compared age groups using bank data from before and after the CARD Act and found that young adults under age 21 are substantially less likely to fall into a serious delinquency (such as 90 days past due or worse) than some older groups in the study. They are also the least likely of all age groups to default on a credit card .

Student credit card use data from Sallie Mae's 2012 How America Pays for College report also point to responsible credit card use among students: Forty-one percent of student card balances are less than $500 and another 33 percent of student credit cards have a zero balance.

Another important finding of the Federal Reserve study: Those who enter the credit card market earlier are less likely to default and more likely to have a mortgage earlier than those who enter the credit card market later, suggesting that early exposure to credit may actually be an asset for young borrowers.

But are all young adults ready for plastic?

Despite the encouraging data on youth and credit cards, teaching young people the basic of responsible credit remains important. Bad credit card habits can affect people throughout their lives and the effects can be costly, says John Ulzheimer, credit card industry expert for

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.43 -0.96%
GOOG $692.36 -0.84%
TSLA $232.32 -3.92%
YHOO $36.01 -1.42%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs