[A]ccording to some reports, up to 63% of Millennials do not have a credit card. They prefer to buy with cash rather than using credit. This trend is due partially to them watching what their parents have gone through in recent months. They have vowed to avoid the debt trap.
Millennials have taken it a step further in many cases. They are waiting to buy a home or choosing not to buy at all. So, if they don’t plan to buy a house, do they really need credit cards?
Planning for the Future
While credit cards are not the only way to build a credit history and have a good credit score, they play a key role. They are one of the best ways a lender has of telling how responsible you are with credit. Even if you don’t plan to buy a house now, you need to establish credit early for the time when you do want to take on a mortgage.
Credit is also important for getting a car loan, renting an apartment and even signing up for utilities in your name. Even if you can qualify for a loan without credit, you probably won’t get the best rates since you are considered a higher risk.
A Long History
Establishing credit now allows you to develop a history for later on. Since your credit report shows up to ten years of positive information, it can help you many years from now. Length of credit history also impacts your credit score, so having a credit card for ten years or longer will help you when you are ready to buy a car or house.
Having a credit card also proves to you that you can be responsible with money and credit. If you make your payments on time and keep your card for emergencies rather than a shopping spree, it is a good indicator that you are ready to take on other responsibilities.
Don’t be afraid of credit; instead learn how to use it wisely. In the end, it will benefit you far more than you might expect.