What motivates credit card companies to offer young people their first cards?

A

alex 008

Member
What exactly is the incentive for credit card companies to offer cards to students or young adults with little to no credit history?

It seems like almost every major issuer has a “starter” card or student-focused product, even though most young people don’t have high incomes or established credit yet. Some of these cards even come with rewards, no annual fee, or perks that seem pretty generous considering the risk.

I get that companies are playing the long game, but I’m wondering how much of it is about brand loyalty vs. profit potential. Is it mainly about getting someone into their ecosystem early, or are they still making money off low-limit cards through interest and swipe fees?

Would love to hear from anyone who’s worked in finance
 
Credit card companies aren’t running a charity. They target young adults because we’re statistically more likely to carry balances, rack up interest, and make them money over time. It’s all about lifetime customer value.
 
It's about long-term profit. If a 19-year-old starts using their card, the bank gets decades of potential interest, fees, and data. They’re playing the long game, and young folks are a golden investment.
 
They got me at 18 with a $300 limit. Thought i was rich.......ended up maxing it out on pizza and gas. Paid it off at 25. So yeah they know what they’re doing.
 
It's a calculated risk. Young people might default more but they also carry balances and pay interest. Plus credit cards are unsecured debt banks set crazy high APRs to offset that risk.
 
They want to get their hooks in early. Brand loyalty is real. If your first card is from Chase, odds are you’ll stick with them when you’re earning six figures later on.
 
Don’t forget rewards programs. Once you’re hooked on cashback or travel perks, it’s game over. You’ll chase those points forever, pun intended.
 
My mom warned me but i still signed up for a card in college cause they were giving out free pizzas. No joke. Free food is a powerful motivator when you're broke.
 
It’s all about the long game. Credit card companies know if they hook you young, you’ll stay loyal and profitable for years. Interest, fees, habits they build up. It’s like planting seeds in fertile, naive soil.
 
Honestly they’re hoping you’ll make dumb mistakes. A late payment here, a big balance there, and bam interest accrues. Young folks are easier targets because we’re still figuring money stuff out.
 
Back in my day, we didn’t get flashy mailers and approval offers at 18. These companies push plastic like candy now. It’s predatory, really. You’re not a customer you’re a future debt machine.
 
When i applied i was 19 and jobless. They still gave me a card. Why? Because they knew my parents would bail me out. They’re not just betting on you, they’re betting on your family’s safety net.
 
I was hooked by travel points. That was the gateway drug. Chase Sapphire hit me with wanderlust marketing and i bit. Been chasing points ever since no pun intended.
 
There is a positive side, though. Getting a card early helped me build credit responsibly. Some of us don’t fall into debt traps and the companies still profit from swipe fees.
 
I moved to the US at 18 and couldn’t do anything without a credit history. Got a student card and bought a sandwich. Boom my journey into capitalism began
 
They’re banking on you failing. The whole system is built on people carrying balances and making minimum payments. It’s legalized entrapment with a glossy brochure.
 
Some credit unions actually offer starter cards with low limits and no fees. Not all companies are out for blood. But yeah most big banks want you hooked.
 
They want your loyalty before you even know what loyalty is. It’s the same reason streaming platforms offer student discounts ........capture the user before they form preferences.
 
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