I love this chart from a recent Wall Street Journal article because it captures the state of credit for young people just getting started in building their credit history: 

Questions:

• What credit type is most prevalent among 18-22 year olds? 23-29 year olds? 
• Which type of loan has the highest balance for 18-22 year olds? 23-29 year olds? 
• At what age do you think you will have the following:
  • Credit card
  • Retail store card
  • Auto loan
  • Student loan
• Which type of credit do you see the largest increase between these two age cohorts
  • on dollar increase in balances?
  • on percentage of consumers with this type of loan?
• Assume that an 18-22 and 23-29 year old carries each of these types of loans at the average amount in the chart, how much debt would the 18-22 year old have? How about the 23-29 year old? 
• Based on your answer to the previous question, does this seem like a lot of debt? What are some of the downsides to having lots of debt when you are young?

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Want to learn more about credit cards? Check out the NGPF podcast with credit card guru Sean McQuay from NerdWallet 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.