Dec 23 2008

The First Credit Card


In the First Credit Card, author Ben Rogers discusses the challenges and rewards involved in young adult credit card programs at credit unions.

Ben Rogers
Managing Director, Research
Report Number 176

Executive Summary

American youth are awash in plastic. One in three high school seniors carries a credit card. Undergraduates report freshman year as the most popular time for getting credit cards, with 56% reporting having obtained their first card at age 18. A young adult’s first credit card is a rite of passage, a gateway to a solid credit record, and often a financial (and social) necessity.

What is the research about?

Young adults, responsible or not, are very likely to get at least one credit card during the transition period after high school. Credit unions that decline to offer or to market their own cards to young adults may miss the chance to build a relationship and a responsible credit user during that key transition phase. In this report, author Ben Rogers discusses the challenges and rewards involved in young adult credit card programs at credit unions.

What are the credit union implications?

Banks have a strategy to seek out customers who have never had a card. College students are among the most prominent targets for this marketing. They are young and understand that they need credit to get ahead in the world. Some need credit because of the rising cost of a college education.

Credit unions that want to deepen relationships with young adults have to offer an attractive competing product. Those that don’t will miss the chance to capture an active borrowing relationship that lasts, on average, 15 years for credit cards.

This report is sponsored by PSCU Financial Services, the Credit Union Executives Society (CUES), Fiserv, and the Corporate Credit Union Network.