Good or bad? 60% of all millenials don’t own a credit card
Reported by Liku Zelleke
These are the same people that grew up during the “Great Recession” and have seen firsthand as people struggled with debt. Their solution to the problem is to simply stay clear of it. While this might sound like a good idea, experts say that in the long run, these same people could find it to be a costly mistake when, for example, they go looking to buy a car or apply for a job.
Jean Chatzky, a personal finance expert and a contributing editor at Bankrate.com, says that these people are missing out on a chance to build their credit scores. In today’s commercial world, it means that bad credit scores make it hard to get things like car loans, affects how much they have to pay for auto insurance and even makes it difficult for them to land jobs.
“They are widely considered a mark of how responsible you are as a member of society. As far as car insurance goes, your credit history is a better indicator of risk than even your driving record,” said Chatzky.
She goes on to say that although it has become harder for people under 21 to own a credit card (due to the Credit Accountability, Responsibility and Disclosure Act of 2009), there is a way of helping kids build a credit score: “What I did with my son, and what I recommend parents consider to help their children build a credit history, would be to put their child on their card as an authorized user,” Chatzky said.
She also advises that those old enough to get their own credit cards should look for fair rates. “There are a lot of really good deals out there; the average is about 14%, 13%, so you want to try to come in significantly below it.”