After witnessing the impact of the 2008 financial crisis and feeling burdened by student debt, millennials are reluctant to apply for and use credit cards, according to a recent New York Times article. The article mentions alumna Rebecca Liebman '15 — who, while a student at Clark, founded LearnLux, a personal finance and financial literacy website for millennials — and her reluctance to pay with plastic.
Here, an excerpt:
"Rebecca Liebman, 23, graduated from Clark University in 2015 with a load of student debt. She avoided getting a credit card until earlier this year, and did so then only because she kept hearing about how she would need to build up her credit history if she ever hoped to get a mortgage.
“ 'I don’t want to use a credit card irresponsibly, and because of that, it’s scarier to use,' she said. 'I grew up — I saw 2008 — I saw my dad get laid off. I don’t trust the financial market.'
"Today Ms. Liebman is a founder of a financial literacy site for millennials, LearnLux, and the reluctant holder of a Discover card. Even after getting the card, it took her five months to overcome her ingrained aversion to debt and make her first purchase — a physical wallet.
"She understands what the aversion will mean for her and for her customers.
“ 'It’s going to make me buy a home a lot later in life,' Ms. Liebman said. 'I think it will impact a lot of big decisions and push them further out. There are some things that are going to be specific to our generation around financial decision-making for sure.'
"The reasons for the shift are varied: Like Ms. Liebman, many young people carry burdensome loads of student debt, making it hard for them to take on any more debt — and giving them a sour taste in their mouths when it comes to credit of any sort. The average American under 35 now has $17,200 of student debt, 182 percent more than Americans of the same age had in 1995, the Fed data shows."