The path toward adulthood often begins with your first credit card, as building credit can open doors to many other financial milestones. In starting down this path, two things are paramount: First, choosing the right credit card for your financial needs and goals, and second, having responsible financial behavior once you’ve made your selection.
As it turns out, fiscal responsibility can become more or less likely depending on the age at which you first start using a credit card. Wanting to know more, we surveyed 1,001 credit card users to determine how earlier or later use of credit cards impacted their current financial standing.
The first credit card a person owns may not exactly constitute as true ownership. Parents and guardians may decide to extend a credit line from their accounts, establishing children as authorized users. When including authorized users, the average age Americans received their first credit card was 20. The majority — 54.3% — obtained their first credit card between the ages of 18 and 20, while just over 4% were younger than 18. Another 30% got their first credit card between the ages of 21 and 24.
Ultimately, this graph reveals a modern trend to begin lines of credit as college-aged adults. If you are currently in college or if you or your children plan to enroll, consult well-researched guides to determine the best student credit cards. Some cards offer benefits for good grades, while others focus on building solid credit histories.
The youngest acceptable age a person should receive a credit card is 19 years old, according to the credit card users we polled. Before this age, respondents considered a person too young for the responsibility and risk associated with personal credit cards. However, they also were concerned about waiting too long before starting a line of credit: 25 was considered the oldest acceptable age to get your first credit card.
Although younger people may make more inexperienced purchase decisions, developing a credit history sooner rather than later can be beneficial. If you begin building credit at 19 years old, you can give yourself about three to four years to establish a healthy credit score before graduating from college or living on your own. If you lack credit by the time you’re ready to move from home, you may experience difficulty when leasing without a cosigner.
There are other benefits and drawbacks to building credit at various stages of young adulthood. Continue reading to see how early credit card use plays into Americans’ financial futures.
Many factors, from gender to education, affect the age at which Americans obtain their first credit card. We found that on average, women became authorized credit card users at the age of 20, one year earlier than men.
Around 45 years ago, women were required to answer questions about their marriage and plan for children in order to qualify for a credit card!
Education and location also determined the average ages for people’s first lines of credit. The most common time, and possibly the riskiest, was during college: 47.5% of respondents received their credit card during this time. College textbooks are notoriously expensive, yet required. Parents would be wise to ensure they and their children are at least earning rewards or cash back on these purchases.
Read More: https://www.fool.com/the-ascent/research/study-when-does-average-american-get-their-first-credit-card/