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YOUTH AND CREDIT CARDS
The Australian Bankers’ Association (ABA) said banks are responsible lenders when approving credit to customers including young people.
The ABA was responding to a media release from NSW Fair Trading Minister Diane Beamer which criticised banks’ lending standards.
The facts on credit cards and young people are as follows:
• Banks decline around two-thirds of credit applications from young people because these applicants do not meet the banks’ high credit standards;
• An estimated 48% of 18- 24 year olds have a credit card – the highest rate of credit card ownership occurs with persons aged 35 – 49 at 79%;
• Of the 18 - 24 year olds who have credit cards, it is estimated that more than 90% owe less than the Reserve Bank’s average balance outstanding. An estimated 30% of young people owe nothing on their credit card.
David Bell, Chief Executive of the ABA, said: “Banks are prudent lenders when it comes to providing credit to young people – around two-thirds who apply are refused credit by banks. It is important, however, to note that 2.2 million young people, aged 18 – 27 years are employed, 70% full-time.”
“Also, many young people are Internet savvy and tend to make purchases and payments online which often require a credit card.”
“Banks and the ABA provide a lot of information on learning how to manage credit as it is an important part of understanding money management.”
The ABA’s publication, ‘Smarter Banking: Make Credit Work For You’ provides basic facts about credit, including the benefits and pitfalls, cost, tips on keeping credit under control and what to do when credit becomes a problem.
It can be accessed on the ABA website:
www.bankers.asn.au or call 1800 009 180 and we will post you a copy.
www.bankers.asn.au
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Updated
on 12/07/2007 |
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