Credit card lifestyle differs depending on generation

13/11/2009

Over one-third (34 per cent) of young adults with personal income worries are refused credit, either immediately or after a referral.

This is according to new findings by Confused.com, which revealed that individuals in their early 20s are the most likely group to have difficulties securing credit.

Approximately half of this age group do not apply for credit cards for fear of refusal and damaging their credit rating.

By contrast, more than three-quarters (77 per cent) of people aged between 51 and 55 are accepted immediately when applying for credit, while the 36 - 40 age group have the most experience in terms of adversely affecting their credit scores.

Head of credit cards at Confused.com Joanne Garcia said the research highlights the differences in credit card lifestyle between different generations.

"Approaches and attitudes differ, however the recognition in clearing credit balances must remain consistent," she said.

"Those with existing balances should make every effort to clear them as soon as possible."

Confused.com revealed earlier this week 40 per cent of people are worried about applying for a new credit card in fear of tarnishing their rating.

Kevin Still, director of EuroDebt, commented: "One of the first things that you should do if you are concerned about whether you are creditworthy is to get a copy of your credit file. EuroDebt offer this service for free to anyone visiting their website.

"Once you understand your current credit rating and the credit burden you are currently carrying, it worth looking at the affordability of further credit - which is exactly what the prospective lender will do.

"If you already have missed payments on your credit file then it is probable that any new lender will take account of this in their assessment. Applications for credit are recorded with credit reference agency used by the lender for that credit application - these are called 'credit searches'. Many creditors use the volume of searches in the last 12 months as an indicator of 'credit hunger'.

"Doing due diligence on yourself first is a worthwhile exercise and then look at the lenders that specialise in your personal circumstances, this may avoid disappointment. Don't borrow more if you are over indebted and don't use a more expensive form of credit, for example a credit card or a payday loan, to fund other credit payments - this is the recipe for a 'debt spiral'. If in doubt take professional advice."

Tags; Budgeting Advice,

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