Millennials applying for credit cards for the first time are often unaware that they will have to pay interest on credit balances they build up.
Research from MoneySuperMarket has revealed that when credit cards advertise as having zero per cent interest, often for a fixed period, or something similar, young people think that all you will pay off is what you?ve spent.
Kevin Pratt from MoneySuperMarket explained: ‘They have no understanding and think it?s a card that is free to use – but as most of us know if you don?t pay the money back you?ll start paying interest and that can really snowball.’
It was found that many 18-24-year-olds are unaware how important it is to make payments on time, and how dangerous it can be to miss a payment.
This age group were found to be especially vulnerable as they can see the credit card as a perfect way to enable them to buy the latest goods and services such as phones and festival tickets.
The comparison website found that credit card enquiries surged by 74 per cent in April and May this year, as millennials go about financing the ever-increasing cost of attending some of the world?s best festivals.
Another problem is that this age group could be harming their credit scores by applying for various cards.
Young people need to be aware that any rejection for credit cards will appear on their credit score and ultimately harm their credit rating.
The price of festivals is certainly not helping the youngster’s cause.
MoneySuperMarket found that the price of a standard weekend festival ticket has increased by up to 320 per cent in the last 10 years.
A standard weekend ticket for a UK festival in 2018 can cost around ?160-200, before taking into account the cost of travel and food and drink.
It seems that the latest generation of credit seekers may need to do more research themselves before applying for credit.