Today’s young generation is growing fast on the path of financial liberty and its dreams quickly. In this, the youth are spending more money than their earnings. For this, a lot of support of credit card is being taken. The recent study of Paisabazar has revealed that youths between 25 and 28 years of age are showing great interest in using credit products like credit cards and home loans. This change not only reflects their economic thinking, but also highlights the easy availability of credit. Let us understand the reasons behind this trend and its effects.
Credit card craze
Paisa Bazar study, in which the credit pattern of more than one crore customers was analyzed. According to the report, youths born in the 1990s start taking credit cards at the age of 25 to 28 years. In the earlier decades, such as people born in 1960 took the first credit product at the age of 47 on an average. Today’s youth prefer credit cards for expenses like online shopping, travel, and dining. These cards not only provide convenience, but also offer attractive offers like cashback, reward points, and travel benefits. For example, banks such as HDFC and SBI are offering cards with low annual fees to woo youth.
Youth interested in home loan
In using credit cards, the number of youth has increased on one hand. On the other hand, the number of people taking home loans with credit card has increased significantly. It is not easy to buy a house in big cities, yet at the age of 28, youth are showing courage to take home loans. According to the study, people born in the 1990s plan to buy a house till the age of 33, which is less than the earlier generations which were 47 years old.
Why is thinking changing?
This credit journey of youth has intensified due to many reasons. Digital platforms, such as money markets, loans and credit cards make it easier. Also, facilities like By Now, Pay Letter (BNPL) and pre-upward loan offers have simplified access to credit. The youth now like to manage big expenses, such as smartphones, travel, or home, through EMI.
However, this convenience of credit is beneficial, but experts warns that taking credit cards and loans without planning can implicate in debt trap. Credit score can be spoiled by not paying EMI and bill on time. Therefore, the youth should use credit only by keeping their income and expenses account.