This is most likely the most crucial element. The CARD Act, a federal law that went into force in 2010, was one significant achievement. It featured a clause that made applying for a credit card before turning 21 more challenging.
Additionally, it tightened the "capacity to repay" requirements for all cardholders and barred credit card salesmen on university campuses.
These were among the various well-intentioned consumer protections that were added. Many Gen Xers have told me how they struggled with credit card debt during their undergraduate years since it was so simple to get one.
The issue is that credit-seeking behavior is all too common. Like starting your first job, that is. Companies prefer candidates with experience, however obtaining experience is challenging unless someone is ready to
It hasn't helped that young adults in the millennial and generation z generations have experienced two economic crises at once. Both the COVID-19 pandemic and the financial crisis between 2007 and 2009 caused particularly severe recessions, which made lenders (and many consumers) especially wary of risk.
In addition, young folks typically have lower credit ratings because they are just starting out. They are among the groups most impacted when lenders are risk-averse. Due to lower early-career incomes, lesser savings, heavy student debt obligations, and generally uncertain financial conditions, they are also more vulnerable.
Traditional beginning cards include secured and student credit cards. Moreover, innovative strategies have been developed by firms like Petal® and TomoCredit to increase credit availability for young adults and other underrepresented demographics. Another means by which young adults can access the credit system is through alternative credit scoring systems like Experian Boost.
Additionally, it tightened the "capacity to repay" requirements for all cardholders and barred credit card salesmen on university campuses.
These were among the various well-intentioned consumer protections that were added. Many Gen Xers have told me how they struggled with credit card debt during their undergraduate years since it was so simple to get one.
The issue is that credit-seeking behavior is all too common. Like starting your first job, that is. Companies prefer candidates with experience, however obtaining experience is challenging unless someone is ready to
It hasn't helped that young adults in the millennial and generation z generations have experienced two economic crises at once. Both the COVID-19 pandemic and the financial crisis between 2007 and 2009 caused particularly severe recessions, which made lenders (and many consumers) especially wary of risk.
In addition, young folks typically have lower credit ratings because they are just starting out. They are among the groups most impacted when lenders are risk-averse. Due to lower early-career incomes, lesser savings, heavy student debt obligations, and generally uncertain financial conditions, they are also more vulnerable.
Traditional beginning cards include secured and student credit cards. Moreover, innovative strategies have been developed by firms like Petal® and TomoCredit to increase credit availability for young adults and other underrepresented demographics. Another means by which young adults can access the credit system is through alternative credit scoring systems like Experian Boost.