Surprisingly, credit card usage dropped from 42 to 35 percent among college students from 2010 to 2012. While this may signal more discerning students for credit card offers and tightening budgets, the reduction may have resulted from the CARD Act’s provisions regarding the application of new credit.
Before 2009, anyone over 18 could apply for a new credit card with little concern. Applicants were not usually asked to verify their current income, either. This led to a tragic susceptibility for wild spending and damaged credit. Nowadays, 18 to 21-year-olds must apply for credit with a verified income or co-signed with a parent.
When I was 19, I applied for my first credit card. I spent too much, churned cards, and wasted my time researching far too much about them. But, in establishing good credit, it has been a success. Sitting at around 767, I am in the highest bracket for lending. While my goal is to reign in my debt for all accounts, the strong credit score has eased my ability to receive credit cards, car loans, and student loans. In the end, I wonder how credit scores will be affected by this swing away from credit cards and reduced accessibility 18-21.
Maybe this reduction will prevent early credit card debt and uncontrolled spending. Maybe it will reduce credit scores and make loans more expensive and inaccessible down the road. Either way, we may be seeing a changing demographic for who traditionally uses credit cards.