Chicago Bankruptcy Attorneys Say Credit Card Companies Tighten Restrictions for Young Consumers
Gone are the days of teenagers getting credit cards before their drivers licenses, thanks to new credit card legislation, Chicago bankruptcy attorneys say.
Starting Feb. 22, members of the under-21 crowd won't be able to get a credit card unless they can either demonstrate an independent source of income or provide proof of parental permission.
Overall, it's probably a pretty smart law - but I've got a couple complaints. First, that they didn't pass this thing sooner, before me - and my first credit card - went to college. Second, that it really only puts off the inevitable. Sure, relying on a checking account - and being limited by the cash in that account - is a good experience. But chances are, most kids are going to end up with at least one credit card someday. Regardless of whether you get that card when you're 15 or 40, you're going to have to learn how to manage it to avoid debt.
The danger of a credit card is that it's all too tempting to spend more than you earn, even if you understand how credit works. Problem is, most young folks don't. When my younger self realized all I had to pay each month was the minimum, it was like putting a kid in a candy store - except all too often my candy store was the mall. It hadn't yet sunken in that paying the minimum meant I was barely covering interest, which also meant my balance never got any smaller. By the time I realized my debt was getting out of control, my monthly payments were so high I couldn't afford not to put everything on my credit card.
Of course, credit cards aren't all bad. Used responsibly, a card is the most important step in building credit history. If you don't have any form of credit until you're 21 or older, you might not have a lengthy enough history to buy a car. In the end, it's about compromise.
If you've got kids, the way you handle your credit could influence their financial future. Using cash when you can to ensure you don't overspend and get stuck in the credit cycle can benefit the both of you. But even if you don't have kids to worry about, it's worth it to reevaluate your spending habits every now and again.
Often times, making a few changes to your budget - cutting out that special cable package, for instance - is all you need to more easily pay more than the minimum each month. Other times, you might need a jumpstart to help tackle a particularly large debt. Bankruptcy can be just that start. Find out if bankruptcy can make debt relief a reality when you sign up for a free one-on-one debt analysis with a DebtStoppers bankruptcy attorney in Chicago.