A growing trend of avoiding as much credit as possible among millennials will leave a lasting impact on the economy and the financial system, according to a credit expert.
The observation came amid recently released Federal Reserve data, which revealed that the percentage of Americans under 35 years old who hold credit card debt is at its lowest level since 1989, even as the total number of U.S. nations using credit cards has been steadily increasing.
Credit.com and Identity Theft 911 co-founder Adam Levin argued that the common perception of being in debt as a slippery slope towards insolvency is misleading.
“It’s critically important for young persons to build credit, strong credit. That doesn’t mean you over-credit yourself; it just means that you should be smart about your credit, that you should be a responsible payer so that you don’t get yourself in over your head,” Levin said.
A driving factor of millennials’ reticence is the fear of biting off more than one can chew, finance-wise.
“They are very wary of spending beyond their means. They’re wary of tools like credit cards. They’re wary of taking any kind of risk, even if it’s really something of a smart risk like investing,” financial author and blogger Stefanie O'Connell said.
“It’s really about overcoming the stigma of the 2008 experience, to build a financially responsible life around mitigated risk,” she added.
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