NEW YORK (MainStreet) — Most people think young people and credit can make for a deadly, debt-ridden mix.

However, young borrowers — those between 18 and 25 years old — are among the least likely to seriously default on their credit cards, according to a new survey by the W. P. Carey School of Business at Arizona State University and the Federal Reserve Bank of Richmond.

The new research found while people in their early 20s are more likely to experience slight or minor delinquencies — 30 or 60 days past due — they actually are much less likely to experience serious delinquency — more than 90 days past due.

The study showed rather than college kids being the most likely to fall behind in payments, it was actually those between the ages of 40 to 44 who were 12 percentage points more likely to have a serious delinquency.

"Young credit card users actually default less than middle-age borrowers," said Andra Ghent, an assistant professor at the W. P. Carey School of Business. "Also, those who choose to get credit cards early in life are more likely to learn from any minor defaults and move on, avoiding major credit card problems in the future. Plus, they're more likely to be able to get a mortgage and become a homeowner at a young age."

The research also showed the propensity to experience a serious default clearly peaks at middle age. People aged 35 to 44 were 10 percentage points more likely to experience a serious default than an 18- to 20-year-old and 12 percentage points more likely than an individual 65 or older.

The study said while it is not clear exactly why defaults increase in middle age and reach their lowest point in older age, one reason may be that people are typically spending the most money during their middle-age years.

"Those also are prime earning years for most people, and people have a tendency to spend to their income," said John Ulzheimer, consumer credit expert at

The study may rebuke the necessity of Credit Card Act of 2009, according to its researchers. That act made it illegal to issue a credit card to individuals under 21 unless the person has a cosigner or submits financial information indicating an independent means of repaying the debt. It also includes a provision banning companies from recruiting credit card users within 1,000 feet of any college campus or at college events.

"Letting students apply for credit cards may actually make sense," Ghent said. "These students are the people who want credit, need to build up a good credit history and have a steeply sloped income profile. If they don't have a student loan, then a credit card may be the only way they can establish a decent credit history."

The study also concludes individuals selected into early credit card use are lower risk borrowers than people who enter the credit card market later, as well as finding no evidence that entry into the credit card market before age 21 increases the risk of financial problems later in individuals' 20s.

"Picking the age of 21 as to when someone can get a credit card is totally arbitrary," Ulzheimer said. "It's not like at 21 people get a better understanding of credit. You have to learn how to manage credit."

Ulzheimer suggests parents help expose their children to credit and learn everything about how the credit cards work so they are more prepared for credit use as young adults.

"You can't simply cast your child out and think they'll understand credit management," he said. "That's irresponsible."

The research also reveals early entry into credit cards is associated with a higher likelihood of getting a mortgage early in life — with the relation between mortgages and early credit card use indicating young people may choose to enter the credit card market to build a strong credit history for later homeownership.

Ghent, however, said the Credit Card Act of 2009 may impact that as well as how young people are getting credit cards. Individuals under the age of 21 are 18 percent less likely to get a credit card — and that may not be a good thing.

"You can't learn by just watching credit card use," Ghent said. "You have to get a card, pay it down every 30 days, and experience, in order to learn. It's also hard to get a mortgage if you can't get a credit card to build up your credit history."

--Written by Chris Metinko for MainStreet