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Uh, What Credit Card?
Younger Americans, more so than any other group, are bypassing the plastic in their wallets
Often, the first step to building a credit history is obtaining — and using — a credit card. Yet, some of the youngest American consumers are skipping that step.
According to Bankrate.com’s August 2014 Financial Security Index, 63 percent of Millennials (which Bankrate puts as adults 18 to 29) do not have a credit card. Twenty-three percent of Millennials have one card, 6 percent have two cards and just 2 percent have three or more, according to the Bankrate report.
Overall, only 35 percent of adults over the age of 30 do not have a credit card.
One reason for the lack of credit card-swiping young adults is the new difficulty in obtaining a card because of post-financial collapse legislation, such as the Credit Card Accountability, Responsibility and Disclosure (CARD) Act.
An April Gallup poll found that since the Great Recession Americans overall are relying less on credit cards. Having come of age during the economic downturn may be part of why the younger generation is proving more credit-averse.
Millennials who do use cards, though, are less likely than other groups to pay their balance in full (43 percent, compared to 53 percent of adults 30+); 3 percent admit to often missing payments.
“Millennials may think they're staying out of financial trouble by forgoing credit cards, but they’re actually doing a disservice to themselves and their credit scores,” Jeanine Skowronski, Bankrate.com's credit card analyst said of the report. “The responsible use of credit cards is one of the easiest ways to build a strong credit score, which is essential for qualifying for insurance policies, auto and mortgage loans, and sometimes even a job.”
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