Touting the Teen-Agers

Many businessmen still flatly refuse to extend credit to anyone under 21, but the ranks of those willing to take the risk are swelling. And why not? Teen-age consumers not only account for an annual bonanza of some $15 billion, but putting them on the credit rolls seems a good way to capture future customers. As a result, more and more members of the Now Generation are finding it possible to pay later: at stores across the U.S., nearly 1,500,000 teen-agers have their own charge accounts, a 36% increase in just 18 months.

J. C. Penney Co. has been pushing a "young modern" charge account for shoppers between 18 and 25--with a $100 ceiling on credit purchases. In Indianapolis, L. S. Ayres & Co. department store has introduced a credit plan for "responsible young adults" between 18 and 21. A few banks are thinking young too. Anxious to build up its junior clientele, Arizona's Valley National Bank has started offering its credit card to qualified teen-agers with ads that proclaim: "It's what is, baby."

Payment Pattern. The credit current runs particularly strong on campus. Wally Reid Ltd., a men's clothing store in Evanston, Ill., cheerfully opens charge accounts for Northwestern University students--although it invariably turns down applications by youths from the town. At the University of Georgia in Athens, the local branch of Atlanta's Citizens & Southern National Bank has been issuing credit cards, says Public Relations Officer Robert Clayton, "like they are going out of style." Still, some stores feel safer with nonstudents. J. L. Hudson Co. in Detroit, for example, extends credit to teen-agers only when they hold full-time jobs.

Many businessmen remain chary of teen-age credit because minors often are not legally responsible for their debts, and even when stores offer such credit, they require that parents guarantee payment. One exception is Detroit's B. Siegel Co., a clothing store with a policy that limits young working girls to accounts of $100 or less for the first six months--until, says Credit Sales Manager William Honig, "we see that a satisfactory payment pattern is established." Seldom does the store require adult co-signers. Explains Honig: "We're establishing credit for the young people, not for their parents."

Fiancees ,. & Finances. Inevitably, some businessmen have been burned. Rose Jewelers, a twelve-store Midwestern chain that does a brisk credit trade among teenagers, finds that purchasers of engagement rings are apt to skip out on their payments if their fiancees break up with them. In Lake Forest, Ill., Kraft's drugstore, a hangout for local college and prep students, abandoned its credit policy because of the difficulty of collecting accounts as the end of the school year neared.

More often, teen-agers prove to be surprisingly good risks. Most of them, says Don Gilson, credit manager of Hanny's men's stores in Phoenix, "are proud to carry a credit card. It's a sign of financial security." At Rich's department store in Atlanta, Retail Credit Manager George Griffeth concedes that "some young people are naive and will overbuy." But the majority are safe and sensible. They usually realize, he says, "that if they hurt their credit rating, it will follow them."

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