According to a Newspoll survey for BankWest in May, the average debt for people who received their first credit card before 25 years of age was $2500, compared with an average of $2180 for all cardholders aged between 18 and 64.

Unfortunately, the researchers didn't delve into why this is so. Perhaps recent generations of young people are more comfortable with the concept of debt than older Australians who grew up without the magic of plastic. Or perhaps the younger you are when you get your first credit card, the more likely it is that mum and dad will bail you out if you get into financial strife, making prudence unnecessary.

Australian Consumers Association spokeswoman Lisa Tait is concerned that young people are being aggressively targeted by marketers with funky coloured cards and gimmicks such as minicards that can be
worn as jewellery.

She says kids are also getting into trouble notching up credit-card debt to support their mobile-phone habit. "If you give someone a mobile phone that's not fully prepaid, it's like giving them a hand grenade," she says.
But that doesn't mean young people are necessarily more financially feckless than their parents' or grandparents' generations.

Garfield Wright, a financial analyst with Cannex, which has done a lot of work classifying the usage patterns of different groups of consumers, says it depends on how young people are when they use their cards.
He says young people are likely to fall into two groups: those who use their cards for emergencies, and those who are a little more frivolous and prone to impulse shopping.

In other words, young people are as likely to be financially astute or as reckless as anyone else. However, because credit cards are likely to be a young person's first experience of handling credit and debt, they are an especially vulnerable group.

Now that home lending has slowed, banks have shifted their attention to credit cards. Reserve Bank figures show that value spent on cards in the year to May 31 was $162.8 billion, generating $180 million in fees for the banks.

Fierce competition for this lucrative market has left savvy consumers spoilt for choice, but there are pitfalls for the unwary.

One trend is low-rate cards with an introductory zero per cent rate on balance transfers from other cards. GE, ANZ, HSBC and, most recently,

BankWest all offer variations on this theme.

The average interest rate on credit cards is about 15 per cent. The BankWest Zero MasterCard, for example, reverts to a rate of 12.99 per cent after four months, with a 55-day interest-free period on new purchases after that date, and no annual fee.

BankWest's head of retail marketing products, Dave Hunt, says anyone feeling the pressure of their credit-card debts can transfer their balance to the new Zero card to give themselves breathing space to get their finances in order. It is also designed to appeal to people who may have a big financial event looming, such as a house purchase or marriage.

Wright says zero-transfer, low-rate cards are most suitable for people who revolve their credit-card balance each month and can't get rid of the debt. With Australia's growing household debt in the news following an interest-rate hike earlier this year, Wright says any card that helps people reduce their debt is guaranteed a lot of attention.

"If you want to get your finances in order, then reducing credit-card debt is the first thing you should address because they have the highest interest rates.

"[If you buy a house] you have to have a mortgage, but with a credit card you could be paying off a pizza you ate two years ago," Wright says.

To be fair, youth is not the only predictor of above average credit-card debt. According to the BankWest survey, men owe an average of $450 more than women, married couples have higher average debts than singles, 25 to 34-year-olds have the highest average debt ($2379) of any age group, and Queenslanders are the most enthusiastic debt accumulators in the nation, with an average credit-card debt of $2570.

If zero interest is the carrot to lure new customers to the BankWest card, then a punitive 19.99 per cent interest rate on cash advances is the stick to discourage poor financial management.

Hunt describes the practice of drawing cash advances on credit as the number one sign of financial distress, and the Reserve Bank agrees. On releasing its May figures, the RBA referred to cash advances, one of the most expensive forms of credit available, as a "barometer of household cash-flow problems".

Cash advances drawn on credit rose 9 per cent in May to $998 million, the second-largest monthly tally on record.

Tait agrees that zero- to low-interest cards work well provided you are confident you can pay your outstanding debt out quickly and are aware what interest rate you will eventually pay.

"There's no need to pay 18 per cent interest any more because there is a lot of competition," Tait says.

She also warns consumers not to be seduced by frequent-flyer points and other features common to more expensive cards if debt reduction is their priority.

Debt lessons 101

University student Olivia Platt-Hepworth, 22, was introduced to credit - and debt - when she went overseas for a year after finishing high school and her father gave her a credit card on his account for emergencies.
"I bought presents for people [on the card] and came back to debt," Olivia says. She is now more aware of the need to manage her finances.
Like many students her age, a credit card is not Olivia's only experience of debt.

"I've got a HECS debt [close to $4000] and a year left at uni. I would like to start working and pay it off," she says.
If there is a silver lining to the dark cloud of HECS debt hanging over many young people, it is the fact that it forces them to plan their longer-term personal finances.

Sensibly, and unlike many of her peers, Olivia prefers to use a debit card for her mobile phone and keeps a fairly strict watch on her credit-card spending.

"I use it to pay for university accommodation, which I pay in instalments online. I also use it for groceries if I'm short of cash, and clothes. I usually try to pay it off in full but sometimes it gets ahead of me and my parents help out," she says.

Olivia says she is becoming aware of other credit options and, now she has a credit rating, she is confident it wouldn't be too hard to change to another bank.

"I've heard of friends getting a better deal in terms of interest rates and the number of interest-free days," she says.