Young people and credit cards

Abstract

The main objective of this study is to see what impact credit cards are having on Maltese young people's lifestyle. Are they experiencing credit card debts? Credit cards are today’s financial passport. A credit card gives its rightful owner the opportunity to withdraw cash and to buy goods or services even if s/he does not have readily available money. By using a credit card, the owner will be charging goods or services to his card account, making a commitment to repay back the money later. A credit card gives the option to repay part of the amount owned by cardholder. In this way credit cards offer a very convenient way of payment and a safer way to carry money around. Through this study it was proved that credit cards are also very popular with Maltese young people. However, it was also proved that, credit cards are encouraging most young people to spend more, making saving very difficult. Hence some young people may be living beyond their means through the excessive use of credit cards. Some may even be experiencing difficulties in repaying their bills on time. As a consequence, interest and late payment fees will continue to accumulate with the possibility that things will get out of hand and one can even end up in a financial crisis. It was also evident that most young people are not aware of the risks involved should their credit card be lost or stolen. These findings indicate that most young people need help to be able to manage credit responsibly. Parents, educators and credit card issuers should feel responsible to highlight to young people the benefits and risks of owning a credit card.