If you are part of the millennial generation, you may have seen how the Great Recession affected your family and friends. Therefore, you may now be basing some of your financial decisions on avoiding the negative consequences that you observed and the high rates of bankruptcy that resulted. If you are avoiding using credit cards as part of that, you are not alone. According to Money Magazine, 35 percent of people over the age of 30 do not use credit cards. However, for adults aged 18 to 29, the number is 63 percent.
Another reason many millennials may not be using credit cards is that legislation has made it more difficult for lenders to target younger consumers. The type of marketing used on college campuses has been limited, as are the age and income limits for credit to be extended.
While avoiding using credit cards is a great way to avoid getting into debt, it may also be doing some millennials harm when it comes to their long term financial prospects. If you have no history of using credit, then you do not have an opportunity to build up a good credit score. Many things are based on credit scores, such as whether or not you can rent an apartment or buy a home, or qualify for a car loan.
Without a strong credit score, you may end up not qualifying for certain purchases or you will be stuck at higher interest rates than if you had a history of using credit cards and paying them off. Therefore, while avoiding debt can be a good thing, a little bit of responsible credit card use may be beneficial in the long run.