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Smart is the New Rich: Money Guide for Millennials by Christine Romans

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Chapter 9Credit Karma

Millennials are breaking the consumer addiction to credit cards. Good for you! For Americans over the age of 30, credit cards—and credit card debt—are the norm. But your generation, chastened by the financial crisis and scared of running up too much debt, is abstaining for several reasons. The Credit Card Accountability and Disclosure (CARD) Act of 2009 made it harder for credit card companies to give out cards with high fees and interest rates to young people. Those under age 21 need a cosigner or must show they have income. A weak recovery and student debt have young people afraid of overspending.

It's an appropriate shift in mind-set away from easy financing. The easiest way to live beyond your means is to have a pocket full of credit cards. So, for now, the caution is wise. Of those millennials with credit cards, only 40 percent actually pay their balance every month. Among consumers over age 30, only 53 percent pay their balance in full.2 Credit counselors say putting away the plastic and living within one's means on cash is the surest sign of financial stability.

Debit Cards

The credit rating agency FICO found that the number of young Americans without credit cards has doubled since the recent recession. They can't get credit cards as easily, and they don't want them. As a result, a dizzying ...

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