November 20, 2017

Are Millennials Really Saying ‘No’ To Credit?

Americans have been using their credit cards less, according to a Gallup poll. A leading financial website decided to commission a study by PSRAI to determine if Millennials were leading the way in this trend. It seems that 18-30s are shunning the use of credit cards at the moment. But there is little to suggest that they are surviving with no credit at all.

Education is very rarely paid for upfront and in full. Many students on both sides of the Pond leave college or University with substantial debts. They are often paid at source from wages, or they are repaid in small amounts monthly. It’s not just the fees from the faculty that need to be considered either. Accommodation and food need to be paid. Many students work part-time to cover some of these costs, but it’s almost impossible to manage this expense without credit.

It seems that young adults are determined to avoid the mistakes of the recent past. The recessions and financial crises that plagued us left many in dire straits. Some even lost their homes. But saying no to a credit card doesn’t necessarily avoid the fallout should it happen again.

Businesses were hit hard, so people lost their jobs. No job means no cash to pay for the loans and mortgages. This is how many ended up losing their home. We need to remember there are many sources of credit these days. Many of them are essential to our lifestyles. Few of us could buy a car without finance. Some of us can’t buy a week of groceries without spreading the cost through credit.

It seems unlikely anyone, including Millennials, could be free of credit these days. Catalogue sales continue to grow year on year. Bad credit catalogues, in particular, are often used to purchase furniture, electronics, and fashion. Without spreading the cost, it is almost impossible to cover the bill for these items. They are often needed in a hurry, leaving no time to save up.

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Thanks to Flickr.com for the pic

Being able to shop online or browse a paper catalogue is much easier than having to visit a retailer. Traffic jams, lack of parking, queues and hiked prices put consumers off the high street. Instead, a quick check on the smartphone or a relaxed click-through on the tablet seems to be the preferred modes of shopping these days. For busy Millennials, this is ideal.

While formal figures for 2015 remain to be seen, it seems very hard to live a life free of credit. Catalogues, car loans, credit cards, and mortgages are the most commonly applied for sources. Credit cards can still also be considered one of the most protected forms of payment for shopping too. Without having credit, it can still be quite difficult to get credit in the future.

Taking credit can be a good idea for many reasons. A wariness about taking on too much is also a good thing. However, life without credit is almost impossible for the average Millennial. Just furnishing and carpeting the first home could run into thousands. Spreading the cost helps.

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