Youngsters in Russia are progressively receiving credit cards from banks, according to the Central Bank's recent statements.
Going Card Crazy: Youngsters Under 20 and Credit Cards
The preference for credit cards among the teeniest of age groups, under 20, persists to reign supreme, according to recent reports. Banks have taken a liking to issuing these plastic money makers to the underage crowd, with 11% of all cards issued in the third quarter of 2024 landing in the hands of young whippersnappers. Russians between 20 and 30 gobble up the most credit cards in the fourth quarter of that same year, accounting for a whopping 21.6%.
Stepping into the mortgage sector, the story's a bit different. Here, borrowers aged 20 to 40 foot the bill for an astounding 68% of the total loan volume from October to December 2024. Youngsters under 20 snag just a paltry 1.6% of the mortgage loans.
Boasting numbers from the Central Bank, it seems that the pool of borrowers shrunk by half a million to 50.1 million people in the second half of 2024. However, the number of Russians sporting microloans swelled to a staggering 10 million by year's end, with an impressionable 49.6% harboring debt from three or more loans. Good news, though – it appears that loan approvals for creditworthy borrowers have started picking up steam in the fourth quarter of 2024.
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Background:
Youngsters and Credit Cards: The boom in credit card use among younger age groups is attributed to several factors. One, they're digital natives, armed with superior digital literacy and financial education. Two, the convenience of credit cards in online transactions makes them amenable to the web-savvy youth. Three, the allure of financial services advertised on social media platforms—favorites of the young set—encourages a inclination to credit card use. Nonetheless, data on the specific distribution of credit card issuance among age brackets in Russia remains hazy. Usually, it's the older age groups with longer credit histories and financial stability that find credit cards appealing. For more granular age-based details, consult recent reports from Russian financial institutions or market research firms.
In light of the evidence, it appears that personal-finance enthusiasts under the age of 20 are increasingly adopting credit cards, despite the majority of cards being issued to the 20 to 30 age group. Conversely, in the mortgage sector, individuals aged 20 to 40 dominate the loan landscape, while personal-finance management for younger age groups still faces challenges, as they account for a small percentage of mortgage loans.
