Source: New York Times

For some fans, a chance to see their favorite artists in concert is the most compelling reason to sign up for their first credit cards and start building credit.

Halie Smith’s devotion to Taylor Swift runs so deep that she feels as if she can trust her like a friend. After the pop star encouraged fans to vote in the 2018 midterm elections, Ms. Smith registered. The 23-year-old’s most recent rite of passage — getting her first credit card — was also prompted by the singer.

When the 11-time Grammy winner announced her Eras Tour, her first in five years, Ms. Smith said she knew she had to “do everything in my power to be able to get tickets.” So she signed up for a card through Capital One, which partnered with Ms. Swift to promote the tour and offered fans preferential access to presale tickets.

“Taylor Swift was once again that push,” said Ms. Smith, who lives in Pittsburgh. In addition to getting concert tickets, she hoped the card would help her to build good credit. “As I signed up, because of the Taylor presale, I realized the importance of financial literacy and maybe it should be pushed more in schools and colleges,” she said. Ms. Smith, who has cerebral palsy, was able to get four accessible seats for her and her friends for about $1,013, though she used her debit card because the total exceeded her credit card’s limit.

Still, getting a credit card was already a goal of Ms. Smith’s, partially because her mother had encouraged her to start building credit so that she would have a good credit score when she moved into her own apartment, and Ms. Swift’s concert deal led Ms. Smith to take that financial step.

More than a decade ago, credit card companies showed up on college campuses to market themselves to students, offering them free food or T-shirts in exchange for filling out applications for their first cards. This practice declined after Congress passed a law known as the Credit CARD Act in 2009 that provided sweeping protections for consumers, including restricting marketing to students on college campuses and at off-campus college events.

But credit card companies have continued to use marketing practices that target young people, including teaming up with their favorite musical acts. Now, instead of free swag, the chance to see artists like Ms. Swift, Harry Styles or Shawn Mendes live in concert is convincing many young music fans to sign up for their first cards.

Like Capital One, Citi offers cardholders early access to concert presales through its Citi Entertainment program, which has no fee to access and is available to all Citi credit card and debit card holders. American Express offers some cardholders preferential access to tickets for Broadway shows and concerts, in addition to exclusive entrances at some venues. But access to certain exclusive experiences, like a three-day package to the Coachella Valley Music and Arts Festival, requires having an American Express Platinum Card or Centurion card — premium cards with exorbitant annual fees.

In the case of the Eras Tour, demand was so intense that millions of fans, known as Swifties, experienced hourslong wait times and frustrating technical issues that prevented them from securing tickets. During one of the presale days, Ticketmaster said it received 3.5 billion system requests to purchase tickets for Ms. Swift’s tour. Some fans applied for their first credit cards through Capital One to increase their chances of obtaining tickets. (Capital One did not respond to a query about whether the issuer had an increase in applications after Ms. Swift’s tour was announced.)

For other young fans, getting their first credit cards allowed them to pay for shows they couldn’t immediately afford.

Leah Garcia, a 21-year-old college student who lives in El Paso, is a fan of artists like Mr. Styles, Dominic Fike and The Driver Era. She recently spent around $800 on tickets to their shows using her first credit card, a Discover card.

“A lot of artists that I’m really into started announcing tours and I was like, ‘Oh god, I don’t have the money in my bank account right now to buy tickets,’” Ms. Garcia said. “So I decided to open up a credit card just because I thought it would be easier access to be able to buy the tickets.”

Ms. Garcia said she consulted with her mother, who explained to her how to use the card responsibly and told her not to use it just for concert tickets. Ms. Garcia said she had so far paid off her credit card before the bill was due with money she made from babysitting.

Nyazia Martin, a 28-year-old graduate student who lives in Louisville, Ky., saw Reba McEntire at a concert in October and had such a good time that she applied for her first credit card to buy a ticket for another show in Indianapolis. Before signing up, she researched the best credit cards for students and decided on a Discover card with a $500 limit.

Ms. Martin, who said she was discouraged by her mother from getting a credit card growing up because “it led to money issues,” spent about $280 for the ticket and also used the card to buy new red boots for the show.

“It just feels like my Reba credit card,” said Ms. Martin, who planned to pay off the balance in three installments.

Ms. Martin said that she gets a stipend to teach theater to undergraduate students and that her program was fully funded. She sticks to a strict budget now compared with when she was working and had more financial flexibility.

Elliot Pepper, a financial literacy teacher and co-founder of Northbrook Financial, a wealth management and tax planning firm, said that it was a positive thing for young people to get credit cards and use them responsibly, but he cautioned them not to fall for companies’ marketing.

“I’m worried that people are jumping to utilize a credit card thinking that, with all the glitz and glamour of the marketing that credit card companies do, they’re somehow getting a deal,” he said. “A credit card isn’t free money. A credit card is just a short-term loan that you have to pay back.”

Mr. Pepper suggested reaping the benefits of having a credit card by signing up for one that offers rewards and no fees, and paying the balance in full every month. “Your goal should be to be the credit card company’s worst customer,” he said.

Jena Soliman considers going to concerts a priority and often travels with her friends to see her favorite artists perform. In 2019, the 23-year-old college student saw Mr. Mendes on tour 10 times. Last year, Ms. Soliman saw Mr. Styles in concert eight times and said she spent from $3,000 to $5,000 on travel costs and tickets using cash and a credit card.

Ms. Soliman opened her first credit card through Capital One a few years ago to purchase tickets to Mr. Styles’s Love on Tour concert series, which was postponed because of the pandemic. At the time, Ms. Soliman, who had already been talking with her parents about getting a credit card, spent about $205 for one ticket.

“Once he announced his tour, that solidified it for me,” Ms. Soliman said.

Ms. Soliman, who has since signed up for a second credit card through Discover, said she paid off her balance in full once she used the card because her father explained to her the importance of maintaining her credit score. She uses the card mostly for concert tickets and occasionally for small purchases like gasoline.

Alyssa Smith, a 33-year-old who lives in Salt Lake City, is the same age as Ms. Swift and has listened to all of her albums since the beginning of the pop star’s career.

Ms. Smith, who works in the medical industry, said the Eras Tour was the first concert she felt financially stable enough to afford tickets to so she opted to do whatever she could to secure a seat at one of Ms. Swift’s shows. She signed up for her first credit card after seeing Ms. Swift in a Capital One commercial and viewed it as an opportunity to get access to presale tickets while also building her credit.

“I’ve been really excited because this is my first credit card,” Ms. Smith said. “I’ve been scared and financially being a millennial it’s pretty difficult.”

Ms. Smith was given priority access during presales because she had purchased tickets to Ms. Swift’s Lover Fest tour, which was canceled because of the pandemic, and because she had purchased merchandise for Ms. Swift’s new album before it came out. Still, Ms. Smith was unable to get tickets because of high demand.