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Young Generation Does Not Use Credit Cards. How Could They?

Credit cards are now not as popular as they used to be. More than 60 percent of young people under the age of 30 have no credit card, and only 20 percent use only one card.

The influence of Great Recession

The one possible explanation is that this generation was brought up in difficult financial situation. They were just beginning their first steps in real financial life when their parents had hardships and lived in need. So now they can be just afraid of really big and important steps, and using credit cards is just another restriction they have made to themselves.

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And this is not a surprise, because we have certain data about the economical situation of that period. Parents of these people have no appropriate work, and the level of unemployment among young generation was up to 15 percent. So there is no wonder why today these people do not even think about being in debt and try to reduce any unnecessary spending. They are living in a different way and can even change the society of consumerism.

A big student loan debt

Unfortunately the Great Recession is not the one historical event that made young people be against any financial obligations. The education that almost all of them got was not a cheap deal, and now they need to pay for it. I mean a student loan that made them dependent for many years. And now when they cannot find work with appropriate level of salary they are just stuck in the debt. So they just do not want to add another debt to their list. And this is a right decision. However according to the research some of them sometimes use installment loans poor credit for some emergencies. This type of loan is short-term, so they do not put themselves into a debt hole.

How young generation leads their financial lives

Making financial life with no usage of credit shows a good knowledge, however it also has its disadvantages. For example todays world is built in such way when you cannot take any credit without having a credit history. This means that you need to have financial transactions recorded on your account. And this is not the only option. Also you need to have a good credit score, because a bad one equals nearly no score at all.

However there are some ways that can help us to avoid leading active credit life:

– You should make all necessary payments on time and cover all regular interest rates to avoid additional charges;

– Make a utility bill for the house for your name. It will be good for your credit history if you can make regular payments.

– Use a secured credit card instead of a traditional one. The funds with this card are backed by money the client deposits. So this can also make your credit score positive and also will never hurt your budget.

As a conclusion I might say that such cautious attitude to credit cards may be considered as a good financial decision in the long run. Also it helps you avoid any credit card debts. If the young generation has chosen a life without credit cards, it is their right. But also I think it can help to change our system with all these credit scores.

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