Acess to a credit card has become increasingly easier for young individuals. Even though the benefit include significant opportunities and convenience, I am convinced that there are still greater drawbacks, especially debt and financial unmanagement.
Proponents for the plus side contend that early access to credit card can help provide young people with financial independence and responsibility. University students in the US are often encouraged to sign up for a credit card. This is because they can have opportunities to take out a loan with low interests and build credit scores early. This is widely considered helpful in later life if they want to buy houses, apartments or for emergencies with a good payment history. Relatedly, gaining early access to credit card not only offers financial benefits but also teaches them how to use money properly. These young people have to plan effective strategies to buy several products within their ability and to avoid unnecessary purchases, which gradually helps develop budgeting skills and a sense of responsibility for their owned money.
Despite credit card’s aforementioned advantages, there are some downsides of this form of payment. Unfortunately, without enough financial literacy education, young people cannot resist overspending. As a result, they are more likely to take out a huge loan to satisfy their demand. If this constistently happens, accumulative debt will pile up, making them increasingly unable to manage to pay back. Similarly, credit card also encourages overconsumption over saving, where people have a strong aspiration for constant purchases instead of puting money aside for their future. Credit card creates a sense of fulfillment, making young generations believe that money is available every time and leading to a reliance on this form of payment. For example, in 2000s, South Korea witnessed national youth bankruptcies. Since then, Korean government had to place stricter regulations on credit card use.
In conclusion, while there are still some remarkable benefits of the credit card, I am convinced that the disadvantages such as uncontrolled spending or a lack of financial management greatly outweigh them.