THE INAPPROPRIATE MANAGEMENT OF CREDIT CARDS OF THE YOUTH POPULATION,

IN THE CITY OF JULIACA 2020 two thousand twenty

Author: Nelson Waldir Mamani Aguilar

I. INTRODUCTION.

In this research work, the handling of credit cards by young people between 18 and 25 years
of age is analyzed in order to determine the possible negative consequences.

Due to the above, the following question arises: ¿How do young people in the city of Juliaca
handle credit cards? To answer, the general objective is: Describe the use that young
Juliaqueños give to credit cards; and the specific objectives: to determine the reasons for
acquiring cards and review the aspects that lead to acquiring their purchases. The working
hypothesis will be that the handling of cards by young people is significantly inappropriate,
which influences expenses and over-indebtedness.

According to the SENTINEL risk center report, 69% of the youth population between 18 and
25 years of age increased their use of credit cards by 29%, and along with this come the
problems of delinquency and financial over-indebtedness. This is the reason why the issue in
question will be addressed by analyzing all the possible causes of why young people acquire
credit cards and why they do not make the respective payments for the service is equivalent to
saying that they are over-indebted.

The problems of over-indebtedness have been due not only to the irresponsible use of credit
cards by the consumer, but also, to a large extent, to the commercial aggressiveness of
financial institutions to place this product. So much so, that they have not only facilitated access
to people who due to their income level could hardly assume the debts contracted, as is the
case of young people who are not yet economically active, but have progressively increased
the limit of credit.

II. DEVELOPING

Today we live in an extremely modern was where the fact of having cash or / or not having
cash at the time is no longer very relevant as it was previously, now for example we make
transactions via the internet, etc. And as a consequence of the modernity of the 21st century,
financial institutions are motivated to grant different types of financing, one of them is the
placement of credit cards, availability of money at the time they want or require which is loan
type, but generally with high interest.
In this situation, young people are influenced to obtain credit cards and this is due to their easy
accessibility to them. However, the management of them leads to many assumptions on the
part of young people who, for the most part, at the time of using them do not measure the
consequence of the unnecessary expenses that their mismanagement may entail. Currently,
credit cards have been important in the evolution and development of the economy of the
countries, since consumers in this case the young people of the city of Juliaca have more
opportunities to get things in an easier way and this it also allows demand to increase in various
market segments. However, there is currently a concern on the part of the financial
superintendency about the high level of indebtedness that is occurring and even more so
because of the current situation of the covid that affects many in the economic crisis.

2.1. BIBLIOGRAPHIC ANALYSIS.

Poma. L, (2010) mentions that the creation of bank cards is only the last link in the evolutionary
chain of the exchange of values. In addition to fulfilling three main functions of a financial
intermediation since it transfers funds, it is a credit instrument and under the security aspects
it contributes to filling the function of custody of securities. It is also a fact that, due to
technological advancement and the growth of the market, credit cards have ceased to be a
class instrument to enter the masses, which has created an increase in operations worldwide.

2.1.1. The use of credit cards

The use of credit cards by the youth population of the city of Juliaca is one of the many ways
of availability of cash and those who grant said availability are the financial entities, but we
have to take into account what was mentioned by Muñoz. G, (2014) mentions that “considering
that at the time of making use of your card you will have to have money that you will receive in
the future for the payment of said use, and so on, the monthly liquidity will be affected since if
The payment of the installments is not made on the established dates, there will not be the
possibility of using the card and you will have to pay default interest.

The consumer does not use their financial product in a measured way, on the contrary, the use
is 100% of the quota or in some cases the excess is used. Which proceeds to an over-
indebtedness of the card, with much higher interest, even exceeding 30% of the approved
quota ”. Therefore, in order for there to be good management by young people, first it is to have
enough information about what it takes to have a credit card, second for what purposes does
the credit card want to ask itself, Would obtaining the card be a good idea? of credit? Will I
have the necessary capacity to meet the interests?
But there are authors, for example Sarmiento .H, (2013) who mention “Obtaining credit cards
by young people is of vital importance because they help the economic growth of the country
and of the person themselves. Credit cards are issued in favor of the user because it constitutes
multiple relationships for which it is recommended that they obtain credit cards ”. Then we can
say with the information obtained from different authors that the proper management depends
on the information that the person has about the proper management that can be given to said
credit card, especially for what purposes it is used.

III. CONCLUSION

In conclusion, once analyzed with the information obtained, the young people of the city of
Juliaca, obtain a credit card in order to cover their daily needs, in terms of its management, a
considerable part has more than two credit cards, they are ignorant Regarding the exact
information of the overdraft charges, when paying their credit card they choose to make the
minimum payment, they are not aware if it is profitable or not and most are unaware of the
amount of interest.

Due to the aforementioned, the handling of credit cards by young people in the city of Juliaca
is inadequate, which can increase their level of debt.
IV. BIBLIOGRAPHIC REFERENCES

Muñoz. G, (2014). Household economy. Bogotá: Economy.

Poma. L, (2010). Use of credit cards. Spain: Loja- Editorial.

Sarmiento .H, (2013). Credit management. Colombia: McGHAW-Hill.