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We typically consider Millennials as steeped in consumerism. It seems natural, then, for them to be neck-deep in credit card debt. Nevertheless, it appears that young Americans are choosing to live with credit card debt after all.
Indeed, many Millennials prepare to ditch the plastic altogether. According to a recent short article from CNN Money, about 16 % of consumers between the ages of 18 and 29 don’t have a charge card at all. Compare that to the truth that only about 8 % of 18-to-29-year-olds did not have a credit in 2007.
The fact that Millennials are less thinking about having a charge card is having an impact on their overall financial obligation also. According to the article, the ordinary amount of charge card debt amongst those in this age group has actually dropped to $2,087 per person from $3,073 per person.
Why are Young Americans Hesitant to Get Credit Cards?
So, why are Millennials so hesitant to get credit cards? Some of the most significant reasons relates to the recession and seeing moms and dads – as well as grandparents – suffer the financial consequences of financial obligation. There seems to be a motion towards buying less and saving up for which is bought amongst more youthful Americans.
Another reason that young Americans are shying away from credit cards, according to the article, is that prepaid debit cards have actually been strongly marketed in recent years. They’re viewed as simply as practical as credit, but they are not credit, you can just invest the money you’ve with a prepaid card.
The Charge card Act might also be having an impact. Passed a few years ago, the CARD Act avoids those under the age of 21 from getting a credit card without a cosigner, unless they can prove that they’ve appropriate earnings.