Recently, many young people started getting a credit card as the access for it became effortless within the years. While this tendency presents numerous benefits for convenient payment methods and financial independence, it also has a detrimental impact on debt accumulation as well as financial illiteracy among younger generations. This essay will delve on both sides of the issue. (great!)
One of the potential problems is that teenagers accumulate large amounts of debts. As access for maintaining credit cards is easy, many youth use this opportunity to purchase their needs. For instance, some boys desire a PlayStation controller, which is extremely expensive for them. Hence, young people buy it with a credit card and take on debt, which can lead to a habit of accumulating debts with an increasing interest rate. Additionally, credit cards can affect people’s poor financial management by spending more money without paying attention to the price. As a result, a lot of them suffer from financial illiteracy and allocate money responsibly.
However, this development enables young people to gain financial independence from an early age, which may help them become more responsible when handling their personal finances. By using credit cards, students do not rely on parents’ income and cover their daily expenses while learning how to manage their finances. For example, if pupils require a laptop for study, they take it in debt and pay by installments during academic years. Also, another benefit of credit cards provide convenient payment method to pay for transportation, groceries, or educational materials by cashless transactions. As a result, they gradually develop budgeting skills and become more aware of their spending habits.
To conclude, having a credit card as a young person is a double-edged sword as it offers both opportunities and potential risks. Nevertheless, disadvantages outweigh advantages as not many students are informed enough about budgeting money. Which can lead to financial problems from teenage years to adult life, with lots of borrowing and debts to close.