Millennials and Credit Cards

It has been found that the best time in life to get a credit card is during your college career, usually around graduation. This is the time your credit score really starts to matter for new life milestones, like getting a house or apartment. However, studies have found that many Millennials are doing credit cards wrong. 

Right now 36 percent of Americans under the age of 30 have never owned a credit card, a statistic that has been influenced by the fact that Millennials have grown up during the Great Recession, skewing their financial perspectives. This however does not mean that Millennials have been using cash to pay for their lifestyles. There has been a large propensity to use debit and prepaid cards. However, this trend is predicted to be changing rapidly as the economy continues to improve, Millennials will be forced to move towards credit cards.

Another reason for the low number of Millennials engaging with credit cards are the restrictions that came along with the CARD Act. The act created some roadblocks for young adults that wanted to obtain credit cards. Americans under the age of 21 must show proof of income to repay card loans or have an adult co-signer if they want a credit card in their name.

There are a number of benefits that come along with young people having credit cards. The main benefit is the opportunity to build credit. Parents can help aid in this by starting their child’s credit score up for success as early as possible. Ways to do this include putting your children’s name on bills or getting a credit card in their name with a low limit. This teaches responsibility, while also building them a credit score that can help them in the future.

Students can still begin building their credit score by securing themselves a credit card during their college years and using it for small purchases each month. Having a low limit will prevent you from over spending or causing yourself debt you can’t pay back. Only using the card for minimal purchases, like groceries or gas only, will also aid in being able to manage paying it back each month. This will work to build up your score slowly but surely, leaving you prepared for the real world after graduation.

Some of the best credit cards for young adults include: Discovery it for Students, Journey Student Rewards from Capital One, and Citi ThankYou Preferred Card for College Students.

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