Questão 559748

Why Millennials Don’t Like Credit Cards

by Holly Johnson

__ Cheap, easy credit might have been tempting to

young people in the past, but not to today’s millennials.

According to a recent survey by Bankrate of over

1,161 consumers, 63% of adults ages 18 to 29 live

5 without a credit card of any kind, and another 23%

only carry one card.

__The Impact of the Great Recession

__Research shows that the environment millennials

grew up in might have an impact on their finances.

10 Unlike other generations, millennials lived through

economic hardships during a time when their adult

lives were beginning. According to the Bureau

of Labor Statistics, the Great Recession caused

millennials to stray from historic patterns when it

15 comes to purchasing a home and having children,

and a fear of credit cards could be another symptom

of the economic environment of the times.

__And there’s much data when it comes to proving

that millennials grew up on shaky economic ground.

20 The Pew Research Center reports that 36% of

millennials lived at home with their parents in 2012.

Meanwhile, the unemployment rate for people ages

16 to 24 was 14.2% (more than twice the national

rate) in early 2014, according to the BLS. With those

25 figures, it’s no wonder that millennials are skittish

when it comes to credit cards. It makes sense that

young people would be afraid to take on any new

forms of debt.

__A Generation Plagued with Student Loan Debt

30 __But the Great Recession isn’t the only reason

millennials could be fearful of credit. Many experts

believe that the nation’s student loan debt level might

be related to it. According to the Institute for College

Access & Success, 71% of millennials (or 1.3 million

35 students) who graduated from college in 2012 left

school with at least some student loan debt, with the

average amount owed around \$29,400.

__With so much debt already under their belts,

millennials are worried about adding any credit card

40 debt to the pile. After all, many adults with student

loan debt need to make payments for years, and even

decades.

__How Millennials Can Build Credit Without a

Credit Card

45__ The fact that millennials are smart enough to

avoid credit card debt is a good thing, but that doesn’t

mean the decision has its drawbacks. According to

Experian, most adults need a positive credit history

in order to qualify for an auto loan or mortgage. Even

50 worse, having no credit history is almost as bad as

having a negative credit history in some cases.

__Still, there are plenty of ways millennials can

build a credit history without a credit card. A few tips:

__• Make payments on installment loans on time.

55 Whether it’s a car loan, student loan or personal

loan, make sure to mail in those payments on

time and pay at least the minimum amount

required.

__• Put at least one household or utility bill in your

60 name. Paying your utility or household bills on

time can help you build a positive credit history.

__• Get a secured credit card. Unlike traditional

credit cards, the funds secured credit cards

offer are backed by money the user deposits.

65 Signing up for a secured card is one way to

build a positive credit history without any risk.

__The fact that millennials are leery of credit cards

is probably a good thing in the long run. After all, not

having a credit card is the perfect way to stay out of

70 credit card debt. Even though it might be harder to

build a credit history without credit cards, the vast

majority of millennials have decided that the plastic

just isn’t worth it.

Available at: <http://money.usnews.com/money/blogs/my-money/2014/11/04/why-millennials-dont-like-creditcards>>. Retrieved on: Nov. 10th, 2014. Adapted.

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