Don't Give Credit to Fear

by Lauren Landau

A recent New York Times article by Nathaniel Popper trumpets the headline How Millennials Became Spooked By Credit Cards. It references Federal Reserve data that indicates young people today just aren't "pulling out the plastic" like they once did.

By Lotus Head from Johannesburg, Gauteng, South Africa -, CC BY-SA 3.0,

By Lotus Head from Johannesburg, Gauteng, South Africa -, CC BY-SA 3.0,

The result is that people under 35 hold less credit card debt than they have in more than 25 years. Debt itself is part of the reason why, specifically student loan debt and the fear of accruing more. For young people who, on average, hold $17,200 of student debt, the prospect of borrowing more money is understandably a bit scary. 

However, cutting up a credit card or refusing to get one creates its own issue. When people want to buy homes or cars, they need established credit to do it.

In addition to saving, part of financial literacy is knowing how to avoid and pay off debt. Having a credit card makes it easy to rack up and put off bills, but the trick is not letting that happen.

I don’t want to go out and buy, buy, buy, even though that’s what society wants me to do. I want to save and invest for the long term.
— Jason Towner, "How Millennials Became Spooked by Credit Cards" (NYT)

The rule with credit cards is that you shouldn't buy anything you can't immediately pay off. Getting a credit card might sound scary. When used irresponsibly, it can lead to a real nightmare. But building credit is an investment in long-term financial health. So go ahead and swipe on a purchase or insert that chip. Just be sure the balance won't sit on your account for long. 

Interested in learning more about financial literacy? Bring one of JWI's Life$avings® programs to your community!