The recession has changed many consumers’ attitudes towards credit card debt, and a recent survey found that teenagers were also affected by the downturn.
These days, fewer teenagers say they are confident and knowledgeable about how credit cards work and how to handle them, according to the 2011 Teens and Money Survey from financial giant Charles Schwab. Only 32 percent of teens say they know how cards’ interest rates and fees work, down from 43 percent in 2007, before the recession began. In addition, 39 percent say they know how to handle a credit card, down considerably from the 64 percent four years ago.
“It could be that the effects of the recession have given these young people a reality check – making them realize they aren’t as knowledgeable about financial tools and products as they may have once thought,” said Carrie Schwab-Pomerantz, senior vice president of Schwab Community Services.
New federal laws also made it more difficult for those under 21 to acquire a credit card, now requiring either a co-signer or evidence that they can independently afford to pay their bills.