Millennial man hides his face because he has is afraid of credit cards

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The generation is afraid of debt, creating a vicious cycle of bad spending

Millennials fear plenty of financial concepts including debt, but their credit cards may be one of their biggest sources of fear.

Two in five (41 percent) of the generation see their credit card as a scary thing, according to a study from student loan refinancer LendEDU. Holding on to debt is what’s causing them to fear the plastic.

The group is not helping itself get over its fear. Bad spending habits and improper use of their cards are creating a credit-phobia for the generation that they can work through and later avoid.

Doing it wrong

The mindset that some millennials have is not helping them use their cards smarter. Nearly 1-in-5 millennials see their credit card as a status symbol for themselves.

“A credit card is a useful financial tool, but a status symbol,” the study says. “Treating your credit card like a key to the upper echelons of society could lead to spending above your means and a mountain of debt.”

Those wayward spending habits include using the card for everyday expenses, as 31 percent of the generation does. Having those expenses leaves less room for things like out of pocket medical bills and other expenses you may need your balance for.

Lacking the knowledge

On top of that, many are not keeping up with the knowledge of cardholder rights that can save them money. Only 32 percent know they can try to reject an interest rate hike from their credit provider to keep their rate lower.

“Under the Credit Card Accountability and Disclosure Act, known as the CARD Act, a credit card holder has the right to refuse to pay a higher APR set by the credit card company,” the survey says. “While chances are slim, the credit card company might agree to the older, lower interest rate.”

Some of the generation is also confused about what happens when they miss a payment on their cards. One out of every four millennials actually think your credit score lowers or stays the same when you fail to pay by the due date, which is not the case.

But if you don’t pay it at all? While they won’t be able to take you to jail for not paying off your debt, it will affect your credit score negatively. Luckily, only 29 percent of millennials have missed a credit card payment and found out that was the case.

Getting better

Millennials could benefit by remembering their original intentions for getting a card. Of all reasons to get their initial credit card, 69 percent wanted to establish credit on their own without their parents, a good way to boost your financial profile as you start out.

For those using their first card, it can be hard to learn how to properly use it without help. But you don’t have to struggle. Our guides can help you take the steps to get a leg up, or back on your feet, without much trouble.

As for the 42 percent of people who say their dating interest is tied to someone’s credit score, that you just can’t control.

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Meet the Author

Ryan Lynch

Ryan Lynch


Lynch is a freelance writer for

Credit & Debt

credit card debt, credit cards, millennials

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