Young Adults Are Avoiding Credit Cards

The number of college kids using credit cards dropped 10 percentage points between 2010 and 2012.

The Denver Post reports fewer young adults are paying with plastic, which has some positives and negatives.

They say 39 percent of undergrads under 24 had a credit card last year. In 2010, it was 49 percent. Part of that may be the 2009 CARD Act, which made it harder for college students to get one.

But those who have them are using them less, too: government data shows the average balance for the age group dropped from $2,500 in 2001 to $1,600 in 2010.

Whatever the reason, it means college students have decreasing debt (except student loans). That’s obviously good.

But fewer credit cards also means fewer young people are building a credit history. Payment history and length of credit history amount to about half of credit scores. If today’s youth has lower scores due to inactivity, they theoretically may pay more for car insurance, as well as for credit cards and loans when they decide to get them.

The Post says lenders are looking at ways to avoid this, possibly by incorporating rent and phone or cable bills in credit histories. That could potentially be good for students avoiding credit cards, but makes paying these bills on time more important for everybody.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Recommended For You


Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,843 more deals!