Every article on how to use a credit card responsibly boils down to one simple maxim “know thyself”.
“If you have personality traits like a tendency to lack self control, if you’re in the process of repairing your finances, or if you’re not ready for personal responsibility, avoid credit cards until you are mentally and emotionally prepared,” advise the personal finance experts at Forbes.
On the other hand, if you can keep careful track of what you have charged on your card and pay it off each month, a credit card can be a powerful and convenient money management tool. The key is knowing the limits of your financial self-discipline.”
Perhaps, the more interesting finding in this specific article concerns the differing attitudes towards credit cards among Millennials and Gen X .
“The millennial generation seems to be more averse to debt as it relates to credit cards, which could be attributed to lasting scars from the financial crisis of 2007-08,” said Doug Lebda, founder and CEO of LendingTree. “Older Americans are more reliant on credit cards to maintain their monthly expenses and cash flows when compared to younger generations. It will be interesting to see how this trend develops with the emergence and adoption of new payment methods.”
In fact, Millennials are the least likely consumers to feel they even need a credit card. Just 29% believe credit cards are “pretty much required today.” Nearly as many said they “don’t need one.” When asked to explain, they said “don’t spend what you don’t have.”
Overview by Alex Johnson, Sr. Analyst, Credit Advisory Service at Mercator Advisory Service
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