A surprising survey has recently revealed that the number of young Americans living without credit cards have doubled in the last 5 years. For many, being able to use that little piece of plastic could be detrimental to their financial well being.
The study conducted by the credit score provider FICO which took a look at credit files from millions of consumers revealed that young Americans between the ages of 18 to 29 living without credit cards has doubled in the last five years.
By watching older generations like their parents get hit hard by the recession, the younger generations are shying away from credit cards. Local student Cassie Tofg has been able to learn from other peoples mistakes.
"I've always heard they were bad, my parents got into some trouble with it and I've seen a friend who gets into trouble with it too so I don't want to put myself in that position," she said.
However, pre-paid debit cards and paying in cash have become attractive alternatives for people such as Tofg. As a result, credit card debt has declined by a third in the 18 to 29 age group from an average of $3,000 to about $2,000 a person. However, some credit card owners felt differently about credit card use. Texoman Melony Watkins practices safe spending measures when it comes to her credit cards.
"I think a lot of people are scared of them because they feel if they put on too much debt, they won't be able to pay them off but if you use them responsibly you will," she said.
But in the end, those who refuse to open credit cards say it's simply because they do not want to make any mistakes.
Although younger generation Americans have debt decline, studies have shown that older Americans have racked up more debt to help their children make ends meet.