Personal Finance Lessons For Millennials Credit Cards 101
Millennials might be one of the most intriguing generations in history. They have challenged the status quo like never before. Organizing climate change parades, fighting for diversity and inclusiveness, valuing experiences more than materialistic possessions – millennials are passionate and not shy to take a stand for things that matter to them.
They are the first generation to have grown up with technology impacting every phase of their life. Technically, millennials refer to individuals born between 1981 and 2000. Millennials are not just idealistic; they are also practical. A report by Merrill Lynch reveals that 82% of millennials invest in savings plans or employer-sponsored retirement plans.
Have millennials ghosted credit cards?
While millennials are generally technically savvy, there’s one product that hasn’t yet caught their fancy yet – credit cards; recent market research reveals that 1 in 2 millennials have only one credit card, and even those who own a credit card do not use it regularly. Compared with millennials, seniors and Gen-Xers use credit cards more frequently.
So, what’s holding back millennials from using credit cards and benefitting from them? We believe several factors contribute to poor credit card usage among millennials:
Access to credit
The problem with credit is that you need credit to get credit. With banks and lenders more averse to risk lenders, it’s difficult for young adults to get a credit card. Low salaries, poor credit scores (especially when they are just getting started) have made it difficult for young adults to get a credit card.
Aversion to Debt
Millennials have been hit by two major economic crises while growing up – the financial crisis of 2007 to 2009 and the recent pandemic. They have also seen several members of the previous generation going bust due to huge unmanaged debt. This has made them extra cautious and avoid debt altogether.
The growth of the digital economy has provided millennials with plenty of other alternatives to a credit card. Today, it’s possible to “Buy Now and Pay Later” without having a credit card.
With that said, we believe that young adults need to master the usage of credit cards as they offer better rewards, more protection compared to other commonly used payment methods. Credit cards are also a great tool to build credit so that you can take on bigger loans like home loans, car loans in the future at the best prices.
If you’re a millennial who is missing out on the incredible benefits of a credit card or have been debating whether you should finally go for a credit card, you’ve come to the right place. This guide walks you through the basics of credit cards – how they work, credit card vocabulary, smart usage tips, and more.
To know more about the Personal Finance Lessons
|Vote for this post
Bring it to the Main Page