First Person: My Teens Are Shunning Credit Cards

Yahoo Contributor Network

My younger son has never had a credit card and he doesn't plan to get one. According to a recent article by CNNMoney, his inexperience with the ways of plastic is not that unusual. Like many younger Americans, he relies on debit cards as well as gift cards. Evidently the number of young people ditching credit cards has doubled since the recession. In fact, 16 percent of people ages 18 to 29 didn't have a credit card by the end of 2012 compared to 8 percent in 2007, CNN reported. My son doesn't need a credit card. He doesn't want to accumulate debt like older people. He has a plan for becoming financially independent which doesn't entail credit card dependence.

Building up his savings

My 18-year-old son is able to put money into savings because he isn't trying to pay off student loan debt or credit card debt. According to CNN, the average credit card debt of his peers has declined from $3,073 to $2,087. With no minimum payment to make on a credit card, he has more money to build up an emergency savings account.

Living at home

My son is also saving money by living at home as he completes his education at a nearby college. When he has become established in his career, he will have the money saved for a house. In order to get a low mortgage rate, experts say a person has to have a high credit score. Without credit card debt, he should have a good debt-to-income ratio. Consumers 18 to 29 with an excellent FICO score of 760 or higher has gone up from about 8 percent in 2005 to 11 percent in 2012, CNN reported.

Avoiding the malls

I can't remember the last time my son stepped foot into a mall. When he shops online, he does so to buy practical items such as ink cartridge for the printer. He knows how to search for bargains. He recently got a great deal on a weight-lifting set by shopping Craig's List. My son spends more time on homework than he does on watching television. It's easier for him to remain a credit card virgin because he doesn't participate too much in the consumer society.

Paying cash for college

I've noticed more of my sons friends are trying to figure out ways of getting through college without taking out a lot of student loan debt. They are working part-time and attending community college. Since our sons didn't' take out any college loans, we feel less financially stressed as parents. We can afford to help pay for our son's tuition because he chose to go to an affordable college.

My son tells me he doesn't plan to ever get a credit card. A credit card doesn't seem relevant to him since he can pay for everything with a debit card. He can use not only a debit card that is attached to his checking and savings account, but a debit card through a discount brokerage firm. As a parent, I encourage him to be part of a credit-card free world where everyone buys only what they can afford to buy and learns to wait for the rest.

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More from this contributor:

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Will Gen-X Live Near Poverty in Retirement?

Tapping Our Retirement to Pay for College


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