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How Millennials Became Spooked by Credit Cards

nytimes.com

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Re: How Millennials Became Spooked by Credit Cards

#71

Post by op00to »

SeanBoocock wrote: post #63

I can identify with this. As a 30 year old, I have never and don't ever see myself owning or using a credit card. The experience of my parents struggling with debt for most of my childhood remains emotionally powerful, even against the opportunity cost of not using credit cards. I am willing to to take extra precautions against fraud and lose the cashback I otherwise would earn, if it means never inviting potential c…

I'm curious what the credit score would be of a fiscally-responsible 30 year old with no credit cards. Care to share a ballpark, if you know?

Re: How Millennials Became Spooked by Credit Cards

#72

Post by ghaff »

icebraining wrote: post #32
Vexs wrote: post #21

Earlier quoted context omitted.

I honestly don't understand why they're so popular here either. A debt card is basically the same as paying with cash, because you have the money. With credit, you're still doing the same thing, but you pay later- either way you're still paying the same amount, but with credit, you can fuck yourself pretty easily. Also, it's because credit cards are so prolific here that it's harder to take out a mortgage, if everyon…

Don't most credit cards offer rewards? If so, it's not true that it's the same thing, especially if there's no discount for paying with cash/debit.

>Don't most credit cards offer rewards?

Typically cash back credit cards also have (especially) egregious interest rates for carrying a balance month to month. And some have a fee.

Cards without cash back typically have lower (but still very high) interest rates.

Re: How Millennials Became Spooked by Credit Cards

#73

Post by Bartweiss »

typetypetype wrote: post #18

> Credit cards are frequently necessary for the bigger purchases - like washing machines and computers... Saving up enough to buy items like without going into extremely high interest credit card debt is responsible consumerism.

And amusingly, the best credit cards for those purchases are almost always obtained during the purchase.

An appliance purchase at Sears comes with 60 months of 0% interest if you open a card - it's debt, but not necessarily irresponsible. Using a normal card to debt-finance the same thing is far less responsible, and I'm not really sure what the article was trying to claim there.

Re: How Millennials Became Spooked by Credit Cards

#74

Post by pc86 »

> Jason Towner, a 32-year-old who works at a private equity firm, cut up his last credit card, from Capital One, in 2010. He did not have any unruly debts, but he had just watched his father and sister close the family furniture store after a bank cut off their credit line in the middle of the financial crisis.

I can't understand this mindset. A bank refuses to extend a business line of credit, so you... cut up a credit card? It's hard to imagine two things that look related but have less to do with each other in actuality. I would expect an PE professional to know that.

The idea that credit cards are bad is rooted in a fundamental misunderstanding of what they are and how to use them to your advantage.

Re: How Millennials Became Spooked by Credit Cards

#75

Post by pc86 »

ljoshua wrote: post #2

Huh, that's weird. I fall into the age bracket mentioned in the article, but use a credit card for nearly every single purchase for 1) the fraud protection benefits and 2) points. With the anecdotal group of people I know most people are fine using CCs. On the other hand, I pay off the statement in full every month, and therefore never have revolving debt that extends beyond 30 days. The article wasn't clear whether…

It was putting my last car's down payment on the credit card that got us enough points to get nearly free ($18 I think) first class tickets for airfare for vacation this year.

Re: How Millennials Became Spooked by Credit Cards

#76

Post by theandrewbailey »

nostromo wrote: post #27

My sense is that Millennials have a less rosy view of their future economic situation than did generations past. I don't know if it was coming of age during a banking crisis or huge student loans or expensive housing or what. But obviously if you're unsure about your future earning potential you'll be more hesitant to rack up future obligations.

It might also be that many are un-/underemployed compared to where they want to be, and have been for years. They don't see their economic fortunes ever improving much.

Re: How Millennials Became Spooked by Credit Cards

#77

Post by icebraining »

ghaff wrote: post #72
icebraining wrote: post #32

Earlier quoted context omitted.

Don't most credit cards offer rewards? If so, it's not true that it's the same thing, especially if there's no discount for paying with cash/debit.

>Don't most credit cards offer rewards? Typically cash back credit cards also have (especially) egregious interest rates for carrying a balance month to month. And some have a fee. Cards without cash back typically have lower (but still very high) interest rates.

Yeah, but you can not carry a balance. I'm not saying it's easy for everyone, but that would explain their popularity.

Re: How Millennials Became Spooked by Credit Cards

#78

Post by cmurf »

loukrazy wrote: post #13

Given the option for zero interest payments on things like appliances and computers, why would you use a credit card for those?

No kidding. Even new cars have 0% financing, but an even better deal is buying a newish used car. But this whole article sounds like it was written by the finance industry as if millennials are irrationally scared (i.e. spooked). I'm increasingly not liking this article!

Re: How Millennials Became Spooked by Credit Cards

#79

Post by jseliger »

ljoshua wrote: post #2

Huh, that's weird. I fall into the age bracket mentioned in the article, but use a credit card for nearly every single purchase for 1) the fraud protection benefits and 2) points. With the anecdotal group of people I know most people are fine using CCs. On the other hand, I pay off the statement in full every month, and therefore never have revolving debt that extends beyond 30 days. The article wasn't clear whether…

but use a credit card for nearly every single purchase

I hope you never end up in divorce or any other sort of court, which will result in your credit card records (and pretty much everything else) being subpoenaed.

I have a credit card but use cash whenever possible. That way, transactions are more likely to be between me and one other party, rather than between me and many, many other parties.

Let me say in advance that I know the system is not perfect, that I know I'm hypocritical for having an iPhone, etc. etc., but I will still note that some level of privacy / anonymity is better than none.

Re: How Millennials Became Spooked by Credit Cards

#80

Post by manarth »

nugget wrote: post #40
Blackthorn wrote: post #25

Earlier quoted context omitted.

For a free $200 flight (on the low end), you'd need to spend (on the bottom end, with an exceptionally good 3% rewards number) 200 / 0.03 = $6667, on whatever stupid categories your credit card has for the 3%. Just how much money do you think most millenials have?

Look up ''churning'' which is the pursuit of mega signup bonuses in order to magnify the rewards. I've earned >1 million points and miles through this method in the last few years, easily $10k+ worth of travel, although I keep it up now more so because it has become a fun hobby and I enjoy it.

There are also articles describing the risk of churning, and that hardcore churners may be damaging their credit reputation by being seen as unprofitable.
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