From kid to bigger kid
Throughout my 22 years, there have been numerous occasions where I’ve stated, “Future Taylor can deal with that.” What I did not anticipate is that Future Taylor would actually begin transitioning into adulthood so soon.
I would venture to guess this takes everyone by surprise. One day you’re playing outside until the streetlights come on, and the next you’re trying to figure out how to fill out a tax form.
Credit card conundrum
One of these “adult” things that I thought would take an eternity before I had to deal with it is the wonderful world of credit cards. Now, I don’t know about you, but there was a lot of real world information I was not briefed on in high school.
In addition to graduating with knowing next to nothing about taxes, insurance, real estate, etc. I was never introduced to the idea of credit.
To be honest, I find the idea of credit rather frightening. I’m well aware that it is important to build credit, but the fact that my financial future is somewhat dependent on decisions I make now is a lot to wrap my head around.
Millennials feel the fear
And, it seems as though many other millennials feel this way, too. After seeing what their parents have gone through with credit card debt and the 2008 financial crisis, people around the just-out-of-college age are reluctant to sign up for cards and begin building their credit.
In addition, many millennials are bogged down by the weight of student debt and are working toward paying that off before digging themselves in deeper.
It’s a catch-22 when you know you need to be building credit for the future, but there is so much that could go wrong.
Debit beats credit
A lot of millennials have become comfortable with paying for everything with their debit cards or a cash app on their phone. From personal experience, it is unusual to see one of my friends pay for something with physical cash, a check, or a credit card.
According to Nathaniel Popper, a 2013 study shows that only 37 percent of households that are headed by someone aged 35 or younger held credit card debt.
This is a statistic that would be wildly different for any generation prior to millennial.
In the end…
Personally, I am slowly getting used to the idea of applying for credit cards and beginning to build credit. But, with so much instability in the world, financial and otherwise, it continues to be a daunting thought.
September 1, 2016 at 10:29 am
I have put a lot of thought into this as a parent of an eighteen year old heading to college and a sixteen year old right behind her.
If you feel you need a credit card, get one, auto-pay a single bill with it and pay it off each month. Hold that credit card for a very long time and NEVER carry a balance while asking for increases in the credit available about every year.
When I look at my credit report I see much more activity around paying off bills each month, on time. Things like an electric bill, phone, etc. all add up as well.
I think that the “need” for credit is a bit blown out of proportion as well, who exactly has the benefit of this premise?
September 3, 2016 at 3:14 pm
Thanks for the feedback, Doug!
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