Millennials came of age during a horrible recession that saw a whole lot of Americans in debt, jobless and going for broke. As a result, many millennials are averse to credit cards as a whole. While it may seem great that millennials are avoiding credit card debt, there’s actually a big downside to nixing credit cards entirely: Millennials are having a hard time actually establishing a credit score.
Jeanine Skowronski, a credit card analyst with Bankrate.com, explained to NBC News, “Millennials may think they’re staying out of financial trouble by forgoing credit cards, but they’re actually doing a disservice to themselves and their credit scores.”
Skowronski adds, “The population has become more credit card shy. There is debt aversion for all ages.”
Here’s the rub: Using a credit card responsibly (paying the full balance every month on time) is a great way to build credit and improve your credit score. Those are integral if you want to take out a loan, buy a house, get an apartment or purchase or lease a car someday. You don’t have to be afraid of using a credit card. You have to be afraid of abusing your credit card.