Smart Borrower Blog

One-third of Millennials Shun Credit Cards

Sep 2nd, 2015 @ 7:04 PM by Amber Nelson

America’s youngest adults are mishandling credit cards, with many applying for too many, some applying for the wrong kinds and many not applying for any at all. The result is that the millennial generation has the lowest average credit score of any age group.

A new report from credit-card comparison website NerdWallet found that millenials – those aged 18 to 34 – are making life harder on themselves because of their credit card mistakes. “Credit cards are amazing tools. They can help you build credit, hold you over financially when you need a short term bridge and provide you with great rewards,” said Sean McQuay, NerdWallet’s resident credit card expert and former strategy analyst at Visa. “But it’s important for consumers to be thoughtful when they’re considering applying for a card. They should know why they want a card so they can find the credit card that best meets their needs. Applying for the wrong card can, if rejected, lead to damaged credit, and if accepted, lead to paying unnecessary fees or losing out on valuable benefits.”

NerdWallet found that 48 percent of millennials who have ever applied for a credit card chose their most recent card because of an advertisement or promotion. Yet these cards can often carry hefty annual fees or late payment charges. Cards should be selected on the basis of low APRs and minimal penalties.

The survey also found that many millennials are applying for too many cards in a short period of time – a surefire way to bring down a credit score. “Especially for younger consumers and anyone trying to build their credit, avoid applying for credit cards too often — a good rule of thumb is to wait six months to a year between card applications,” added McQuay.

And finally, even though almost a third of millennials – 31 percent – have never applied for a credit card, that lack of action could be hurting them as well. About 15 percent of a healthy credit score is the length of a credit history and without any other reportable financial accounts, millennials may suffer from not having enough of a credit background. Making small charges on a card and paying them off every month is a smart way to build that credit history.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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