COLUMN ONE : Giving Teen-Agers Credit : Card issuers target high school seniors to open up a saturated market. Some see it as a rite of passage. Others fear the students could mess up their future by maxing out.

When Yana Yanovsky of Huntington Beach bought her high school homecoming dress last year, she didn’t have the $80 in cash. So it went on her parents’ credit card.

This year, things were different. As a senior at Edison High, she got her own card. It was easy, she said. One of the nation’s largest banks sent her a letter inviting her to apply.

These days, giants Chase Manhattan Bank, Citicorp and other credit card issuers are competing to sign up high school students. They are targeting college-bound seniors, regardless of income, offering them Visa or MasterCard accounts in their own names. The cards have a $500 limit but no security deposit. The only caveats: Students must have no credit problems, and parents must co-sign for minors and ultimately are responsible for the bill.

The reason for the move is clear. The traditional credit market is saturated, with more than 255 million Visas and MasterCards in circulation. So, banks are thinking younger, hoping to gain new customers now and build long-term relationships for the future.

“What issuers discovered is that if you get your hooks into a consumer early, there’s a loyalty that springs from that,” said industry analyst Bob McKinley of RAM Research Corp. in Maryland. “They’ll stay with the credit card company for 10, maybe 15 years.”

The highly competitive credit industry is tight-lipped about details of its high school recruiting efforts. Some banks say they have been test marketing to teen-agers for years, but industry analysts say this is a major campaign that began this past school year.

Banks tried to go younger once before. A decade ago, the industry saw that the market was saturated and decided to sign up not just those who had solid incomes, but those likely to have solid incomes.

That meant college students. Competition for their accounts became so intense that banks set up card tables at class registration lines and slipped applications under dormitory doors. But even that market is filling up, so attention has shifted to college-bound seniors.

It is too early to tell how teen-agers and plastic will mix. So far, the track record is based mostly on students who use their parents’ cards. (MasterCard International estimates that 4% of high school students have their own and another 24% use their parents’.)

Most card usage seems to occur in affluent areas. A spokesman for the Wherehouse music and video chain said that in high-income areas up to 15% of teen-agers’ purchases are on credit.

As more young people get their own accounts, the cards are becoming status symbols. “In my neighborhood, credit cards are just kind of the in thing to do,” said Darrin Hurwitz, 17, who just graduated from Calabasas High School.

“I live in a pretty affluent neighborhood where kids get everything they want. It comes with living in this area. It’s a grown-up kind of thing where you can impress people with it.”

Some students see practicality, not prestige.

“I think (credit is) a good thing to have in an emergency,” said Trisha Ginsburg, 17, of Long Beach. She believes that teen-agers can be responsible with their money. “All kids aren’t going to be stupid and go crazy with it. It just depends on the person.”

Others are not as optimistic.

Students “look at parents and people who have bad experiences, and they have evil thoughts about credit cards,” said Carolyn Lynch, who just graduated from Mater Dei High School in Santa Ana, where many seniors received applications this year.

“I have friends who carry cards . . . with no responsibility to pay for it,” said Shara Cohen, 17, of Fullerton. “They spend wherever they go. I know when I buy something I have to pay for it eventually.”

Shara’s mother, Eileen, said she co-signed for her daughter because “we realized that for her own security and safety, our daughter could benefit. She only has it for emergencies.”

But other parents are not as sanguine.

“I think it’s a terrible idea,” said Darrin Hurwitz’s mother, Cindy. Teen-agers “are growing up in a culture where it’s just too easy to spend money. I just don’t think high school seniors need a credit card. I know from my daughter that there are kids totally maxed out on credit cards. I can see it can be a problem.”

She said she also is concerned about parents who set bad examples. She recalls hearing two young women talking in a clothing store: “One of them was saying she’s maxed out on her credit card--$2,000. And the other one says: ‘Why not just have your mother pay it off? That’s what I did.’ And the other one says: ‘I can’t, she’s already maxed out on hers.’ There it is, role modeling at work.”

So far, parent backlash has been isolated. Bankcard Holders of America, a consumer advocacy group in Herndon, Va., reports receiving complaints but not enough to warrant action. A complaint in Illinois resulted in the recent passage of the nation’s only state law that bans giving minors credit cards without parental consent--an issue that is largely moot because most banks require co-signers.

To avoid stirring negative reaction with national advertising campaigns, banks have depended mostly on direct mail. Names and addresses of high school seniors are easy to get, if a bit expensive--$50 to $75 per thousand, according to one list broker.

One firm, American Student List Co. of Long Island, says it has 8 million high school students on file. A spokesman said he could provide names, addresses and the median family income by ZIP code for about 90% of all the seniors in the nation.

New York-based Chase Manhattan Corp. and Citicorp concentrate on college-bound seniors and say they are only test marketing--an assertion some analysts doubt. Virginia-based Signet Banking Corp., known for its aggressive marketing, says it sends applications nationwide and welcomes any high school senior, college-bound or not.

Analysts say that banks send a majority of their solicitations to the two coasts, where consumers tend to charge more and carry larger balances.

Southern Californians especially are seen as “early adapters,” people who respond more quickly to new trends, said Stuart Himmelfarb of Roper CollegeTrack, a New York youth market research firm. “Even if high school students in Topeka would be as interested in a credit card as students in the Valley, there is a tendency to look to California,” he said. “It’s one of the givens in the marketing world.”

Himmelfarb said it is too soon to tell how often high school students will use their cards, but they are “a pretty active group of consumers.” Roper surveys show teen-agers frequently spend money at department stores, movie theaters, restaurants and supermarkets, all current or soon-to-be credit venues.

Issuing cards to the high school market “makes eminent good sense from a business perspective,” Himmelfarb said. “This is where (banks) are building their future customers.”

It may take a while to build this clientele. Only 46% of 16- and 17-year-olds want a credit card, according to a national survey by Teenage Research Unlimited of Northbrook, Ill.

The industry hopes these new customers will be good customers. Bank studies show that younger credit users are more responsible than the average customer. While 71% of all card holders carry a balance, only 30% of college students do, researchers said. Also, college students default at a lower rate.

Nonetheless, banks acknowledge that studies also show that high school students are alarmingly ignorant about personal finance.

In response, banks have developed consumer programs aimed at high school students. They hope to produce more responsible credit card users and eventually to reduce the 5.5% default rate on all accounts.

“That’s the long-term strategy,” analyst McKinley said. “The short term of it is responding to criticism of the industry.”

The most elaborate program is “Choices and Decisions,” produced for Visa by LucasFilm Learning, part of “Star Wars” creator George Lucas’ entertainment organization. The video, computer, laser disc and workbook course takes 13 class sessions.

Financial institutions buy the kits from Visa for about $150 each, then donate them to high schools as part of public relations programs. So far, 4,500 have been distributed nationwide, a spokeswoman said.

“It’s a really nice resource,” said Nancy Hunyadi, a Fullerton High teacher. She included the program in her consumer decisions class and will use it again, she said. “I don’t think it was biased (toward using credit cards). It seems to me the students today are not hasty to get into the credit card game in the way some of us older ones were.”

MasterCard’s 20-minute video, “Master Your Future,” will be distributed free this fall to 10,000 high schools around the nation, spokesman Steve Apesos said. It will include a teachers manual but no sales pitch, he said.

“The PR isn’t in the video; it’s in being able to offer the video,” Apesos said. Parents need not fear that their children will be pressured to get cards, he said.

“But people have to realize that (high school students) are creating their own rite of passage, and part of that is credit cards. They need alcohol awareness, AIDS awareness, credit awareness,” Apesos said.

“They can go into a pizza parlor and there’s a credit card application. They go into the restroom and there’s a condom machine. They see these things. You have to talk to them about it.”