Millennials are a complicated lot. While it’s easy to identify this batch of current grads as the “financial obligation generation,” it’s also simply as proper to identify this generation as “debt-averse.” After watching their parents suffer with the consequences of the housing bubble rupturing (which, for some, included foreclosure on their childhood houses) and feeling burned by student loan financial obligation, Millennials are preventing borrowing more than they have to.

And less borrowing for twenty-somethings is both a good and a bad thing.

On the upside, Millennials are charging less on credit cards and hence acquiring less credit card financial obligation than later generations. In fact, many are pulling out of credit cards completely. A current study reveals that even more than 6 from 10 Millennials do not possess a single charge card– a shocking number when you compare that to only 35 percent of over-thirties who have actually pulled out of cards. Many experts point to the inadequate economy and the stacks of student loan debt owed by Millennials as reasons why they’re avoiding charge card and selecting debit cards or pre-paid cards rather. This can be viewed as a favorable signal that this generation is pulling out of the “debt is fine” customer approach that can lead to uncontrollable credit card bills and monetary trouble.

On the drawback, not having a credit card might suggest that Millennials are losing out on increasing their credit scores. Twenty-somethings without any financial obligation or with just student loans to their names might either have a thin credit file or inadequate credit history if they’ve fallen back on their student loan payments. Having inadequate credit history and no credit history are both problem for Millennials who ultimately wish to qualify for a bigger loan – like a car loan or a home loan – in the future. Without developed, positive credit, twenty-somethings will be less likely to qualify for loans if they do decide to borrow later on in life. So while pulling out of charge card today could be a good thing for their present-day budget, Millennials may be closing doors on their own in the future.

So what’s the right strategy? Should Millennials be opening up credit cards, or are the majority of them making smart moves by preventing them completely?

When it pertains to choosing whether or not to open up a credit card, all of it boils down to a men and women’s ability to use it responsibly. Credit cards do not cause financial obligation, purchasing things that you can not manage and investing even more cash than you earn cause debt. Millennials that do opt to utilize charge card properly and pay their balance completely each month can not just both stay clear of the financial obligation trap, but they can build positive credit history, too. Likewise, if there was ever a monetary emergency that required a short-term loan, having a charge card on hand might be a money lifesaver.

credit cards, credit solutionSo long as they are made use of carefully, charge card aren’t always a bad thing. However up until Millennials recuperate from the shock of the housing crash and their mounting student loan financial obligation, they might be opting out of charging on plastic for a few years to come.