New research from the AXA Financial Task Force has shown that teenage children expect to take out credit cards and loans when they turn 18. The independent psychologists, economists and industry experts of the AXA group found that 44 per cent of 15-17 year olds plan to take a credit card out on their 18th birthday, whilst a further 18 per cent expect to have a bank loan as they enter adulthood. Worryingly, 17 per cent of the study’s respondents expected to be overdrawn when they turn 18.
Of greater concern is the lack of financial nous possessed by the country’s teenagers. The study found that teenagers lack simple budgeting skills, with 70 per cent of teenagers failing AXA’s week long budgeting experiment which handed over control of the household budget to 20 children.
During the experiment, the whole group were 16 per cent over their budgets, with one child spending double his allocated budget and just a small minority able to keep within the allocated limit. Furthermore, to add a sense of realism to the task, with the roles of parent and child reversed, just 35 per cent of children were able to cope with the parents’ demands for extra cash .
Teens Expecting to Take Out Loans and Credit Cards
Thu, 22 May 2008
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