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How Risky Are Young Borrowers?

By Peter Debbaut, Andra C. Ghent, Marianna Kudlyak and Jessie Romero

Economic Brief

December 2013, No. 13-12

Young borrowers are conventionally considered the most prone to making financial mistakes. This has spurred efforts to limit their access to credit, particularly via credit cards. Recent research suggests, however, that young borrowers are actually among the least likely to experience a serious credit card default. One reason why people obtain credit cards early in life may be to build a strong credit history.

Additional Resources

Debbaut, Peter, Andra C. Ghent, and Marianna Kudlyak, "Are Young Borrowers Bad Borrowers? Evidence from the Credit CARD Act of 2009," Federal Reserve Bank of Richmond Working Paper No. 13-09R, Revised November 2013.

Walbaum, Michelle, "College Students Need to Handle Debt, Credit Cards Wisely," USA Today, August 14, 2009.

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