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Younger People Avoiding Credit Cards

December 28, 2014
Plain English Version

credit cards and young peopleFewer young people are getting credit cards. More than 60 percent of those between ages 18 to 29 say they do not have a single major credit card. Only 35 percent of those over 30 say they have no cards.

There are a number of reasons for this. And they are both good and bad.

First, it is harder to get a credit card. A 2009 law limits marketing credit cards to college students. The number of students with credit cards dropped from 50 percent in 2009 to 33 percent last year.

Another big reason is the burden of student loans. Adding more debt does not seem like a good idea to many.

A lot of young people do not have jobs and steady incomes. They may simply not qualify for credit cards. Some have simply had credit card debt before. They do not want to start being in debt again.

The young people with credit cards are more likely to have a balance they owe and to miss or be late in payments.

There are good reasons to have a credit history. The most important reason is that it helps when you need it for large purchases such as buying a car or a house. You need to use credit to establish a credit score. When you apply for a loan, the lender will look at your credit score. Usually, the higher your credit scores, the lower the interest rate you will have to pay.

Credit scores can change over time, depending on your spending patterns and debt payments.  Make payments on time, and pay off as much as you can.

Experts say it is a good idea to get a credit card and use it wisely. Get the credit card limit as high as you can, but keep what you owe as low as possible. The closer you are to owing as much as you can, the lower your credit scores will be.

Source: The New York Times September 9, 2014

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