According to a recent survey completed by Bankrate, more than half of Millennials (the generation reaching adulthood around the year 2000) are saying “no” to credit cards. Instead, they are turning to the use of debit cards and prepaid debit cards. This is in stark contrast to the generations of America who are over 30 who are still using credit cards. As a bankruptcy attorney in Littleton, Aurora, and Centennial, I have to ask: “Will bankruptcy be less common?” Let’s explore this issue further.
6 out of 10 Millennials Don’t Have a Credit Card
Surveys show that 63% of people under the age of 30 don’t have a single credit card. This is vastly different than generations over 30 – only 35% of them don’t have a credit card. This phenomenon is a growing trend – from 2007 to 2012, the number of Americans without credit cards doubled. It’s interesting to discuss why younger generations aren’t using credit. There are a few possible reasons:
- Bad economy and enormous student loan debt has scared many young people away from opening credit cards.
- It’s more difficult for young people to get credit cards than before. In 2009, legislation made it harder for younger people to be approved.
[pullquote align=”center” textalign=”center” width=”90%”]60% of people in their 20’s don’t have a single credit card.[/pullquote]
Pros and Cons of Not Having a Credit Card
[pullquote align=”left” textalign=”left” width=”10%”]Cons:[/pullquote]
There are pros and cons to not having a credit card. One of the downsides is that young people aren’t building credit. Using a credit card helps build a credit profile, and often boosts credit scores. This makes it more difficult to get a car or home loan, qualify for insurance policies, and in some cases, get a job. But, credit cards are only beneficial if used responsibly. If a young person gets a credit card without knowing how to use it responsibly, the opposite is true.
[pullquote align=”left” textalign=”left” width=”10%”]Pros:[/pullquote]
The upside to not having a credit card is less debt. It’s interesting to take a look at the 40% of Millennials who do have a credit card. Studies have shown than only 40% of those with credit cards pay their balance in full each month, which is contrasted by 53% of people over 30. This shows a lack of responsibility with credit cards; buying things they can’t actually afford.
Will Bankruptcy be Less Common in Greenwood Village and Denver?
With Millennials opting out of using credit cards, it seems credit card debt will be less of a factor in financial difficulty. While this will have an effect, many people don’t realize that 60% of bankruptcy filings are the result of medical expenses. So, while credit cards may be a thing of the past for many generations, life still has its ups and downs. Bankruptcy isn’t always the result of bad judgment –for many people, financial difficulty falls upon them because of student loans, a medical emergency, or the loss of a job. If you have found yourself dealing with overwhelming debt, take control of your life and contact me for a free bankruptcy evaluation. I’ll discuss the freedom and relief bankruptcy can provide.
Contact experienced bankruptcy attorney Barry Arrington for a free bankruptcy consultation to discuss a plan for a fresh new financial start. Contact his office at 303-205-7870,
or submit the “Get Help Now” form.
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