Schools 'should offer credit card advice'

Young people need more guidance about applying for credit cards.

Paul Ryan, managing director of Opportune Home Loans, states many consumers are unaware an overuse of credit cards and making multiple borrowing requests could - in the long term - impair their capacity to access other financial products later on in life.

Making excessive credit card purchases could cause difficulties when applying for a home loan, as the high number of checks generated by such expenditure could have an impact on a consumer's credit report.

Consequently, he calls for young people to be educated on the need to converse their credit purchases.

"What I'm promoting is an education system, whereby through the schools, universities and TAFE [colleges] provide training or insight to the next generation of borrowers about the importance of their credit worthiness," he tells the Sydney Morning Herald.

He adds that - at present - a significant number of Aussies are unaware that every time they raise their credit card limit - it will be registered as a credit enquiry.

Those looking to get to grips with their spending, however, may want to select a card offering an interest free period on purchases.

Meanwhile, research carried out by Commonwealth Bank revealed that some 72 per cent of 18 to 24-year-olds has reduced their spending in a direct response to the financial crisis.

Written by Joe Letts.