Parents, maybe we should be taking a page out of our kids’ books! An article I read today reported that since the recession, the amount of younger Americans who are opting not to use credit cards has doubled. These young adults are relying on debit cards and pre-paid cards more these days. It could certainly be from watching their parents and grandparents get blindsided by the recession, that this age group has made a conscious decision to avoid credit card debt and only pay for things with the money they’ve actually got in their bank accounts.
This great article in CNN Money by Blake Ellis will tell you more:
“About 16% of consumers ages 18 to 29 didn’t have a single credit card by the end of 2012 — up from 8% in 2007, according to data that credit score provider FICO collected from the credit files of millions of consumers.
As a result, credit card debt has declined by about a third among this age group — from an average $3,073 to $2,087 per person. After watching older generations — like their parents — get hit hard by the recession, many younger Americans are shying away from credit and opting for debit cards instead, according to FICO.”
Click here to find out how the younger generations’ credit scores are being impacted, and what their parents’ finances look like.
I’ve gotta tip my hat to the kids–er, young adults, for handling the recession like seasoned pros. It’s smart to only charge to credit what you can pay off each month in full, and it’s even smarter to not charge at ALL if you know that you can’t pay in full, or you fear that you’ll get sucked into a bad cycle of piling debt on. Just make sure you guys have enough credit activity so that you have an established and good credit score. Too little borrowing can actually result in not enough credit–something lenders frown upon. Otherwise, keep up the good work