Avoiding Debt Is More Important Than Your Credit Score!

What would you rather have? No debt or a better credit score?

If you’re the folks at TD Bank, apparently you take the score.

Their PR department just shot me a pretty lame press release, and after asking if I was going to share it with my audience twice within 24 hours (impatient, much?) , I decided to give them what they want.

Though it probably won’t be what they were hoping for ;)

Here’s what they sent below, along with my gut reactions… Am I alone here??


Millennials, the largest generation, show a significant aversion to credit, perhaps because they’ve lived through the financial crisis and battled student loan debt. In fact, a recent study from TD Bank found that almost half (44%) of Millennials aren’t using credit at all. Those who don’t use credit are missing out on the opportunity to reap rewards and establish the credit scores they’ll need for big purchases down the road – like a house or a car.

Soo… risk debt for better credit?? So you can – wait for it – take on more debt??

TD Bank’s recent survey set out to find out why Millennials are credit averse, and uncovered the following:

  • Millennials Are Missing Out on Easy Cash:

Only one-fifth (19%) of Millennials say the biggest benefit of using credit is it allows them to earn rewards, meaning the other 81% may not realize how valuable earning cash back rewards for the purchases they make most often can be.

Or meaning they actually hate debt! Which your study clearly shows!

Only 17% of respondents make big ticket purchases with a credit card, missing out on the opportunity to earn even more cash back rewards when making large purchases like airline tickets, hotel reservations and electronics or large appliances, to name a few.

You know what else this shows?? That millennials are paying *cash* for big ticket purchases instead of credit. And what would you rather have – a few dollars cash back or 0% chance of going into debt? Good for them for having the funds to pick up this stuff!

  • Millennials Aren’t Establishing the Credit They Need for the Future:

Only 28% of Millennials say building credit is important so they appear trustworthy to mortgage lenders, meaning almost three-quarters aren’t considering the importance of establishing credit now.

This part I’ll agree on. While credit isn’t the end-all be-all, it’s definitely an important factor. And something that took me way too many years to catch onto, sadly.

Fewer (just 18%) say building credit is important so they can make large purchases in the future.

Awesome if they’re still planning on using cash (imagine buying a house or car in full??), but yeah – not so much if they are eventually looking to finance something.

  • Millennials Are Worried About Incurring Debt:

When asked what is the biggest benefit of using cash, most Millennials said using cash ensures they spend within their means and one-fifth say they worry using a credit card will make them incur debt. However, strategically using credit for regular purchases can help Millennials keep track of their overall budget.

COME ON!!!! If people are worried about going into debt AND spending within their means, then leave them alone already! They’re being smarter than most other adults out there! Who cares about the rewards if you’re just going to dig yourself into a hole in the end and pay more for the privilege of it.

The “better for budgeting” play only works for those who already trust themselves around plastic too, btw – not those who don’t. This is pretty much the worst pitch I’ve seen trying to get someone to sign up to their products, ugh…

Only 8% of Millennials say a high initial credit limit is important to them when applying for a credit card, indicating they are cautious about spending within their means.

YES! And this is bad, because?? We should all be cautious about our spending as financial security trumps credit all day, every day. And none of this, btw, means that you can’t have decent credit just because you don’t use credit cards. There are plenty of other ways to build up credit history, even if they take a little more effort.


Maybe I’m reading too much into this, but damn… This fires me up! And I’m a lover of credit cards too! I use them for all the great reasons most of you do too – convenience, cash-back, miles, and yes – even budgeting. No one’s going to deny the benefits they bring.

But you can’t discount the enormity of what debt can do to a person either – especially those who have clearly stated how nervous they make ’em (and rightfully so!). Pitch your cards to those of us already comfortable and looking for better cards, and not to those doing their best to stay out of trouble.

Good for every last one of you who have rejected the idea that you “need” a card to make it in this world. If anything good came out of all this, it was to see just how many of you are bucking the trend and doing  your own thing! 44% is freakin’ fantastic – stay strong!

Now what say you in comment-land? Am I totally off base here?

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  1. The Green Swan August 26, 2016 at 5:21 AM

    I hear ya J$, credit can lead to debt which can lead to trouble. Right along with encouraging millennials to avoid credit though I would encourage them to improve their financial literacy and understanding of how credit cards work. They are missing out on benefits that are easily attainable with a little bit of knowledge. Knowledge is power.

    1. J. Money August 26, 2016 at 9:46 AM

      Very true, indeed.

    2. superbien August 26, 2016 at 11:51 AM

      I’m with both of you. That article was a bit patronising. If it had said, ‘hey, good job you guys have your heads screwed on right and your instincts are good… But were you aware of careful ways you can use credit cards to help your credit score without going into debt?’ that would be a totally different story. Instead it sounds like a not-very-smart person is trying to manipulate people for their own benefit. Fail.

      1. J. Money August 28, 2016 at 3:27 PM

        Haha…. I won’t disagree with you :)

  2. Hannah August 26, 2016 at 5:34 AM

    I’m actually shocked that 44% of millennials don’t use credit at all. Do you think that means that they don’t have a credit score or that they are thin file?

    At the end of the day, I would much rather see people avoid debt than obsess over their credit score, but I have to admit that I think that having access to credit cards with high credit limits is something that I think is an important part of an emergency fund. Not because I think you should go into debt in an emergency, but if you need to fly across the world because your kid is in a coma halfway around the world, then credit cards will be useful (example is a real life).

    1. J. Money August 26, 2016 at 9:48 AM

      I know more people are using apps and new technology to xfer money around – especially around smart phones – so maybe all of that is helping lead to less credit card use too? As well as the younger gen just not buying so much *stuff*?

      1. Miguel September 4, 2016 at 5:18 PM

        You hit the nail on the head – millennials are largely buying less “stuff” and the stuff they do buy is largely subsidized. Cellphones are a big one here. Millennials obsess over their phones – where that would have been $700+ without contract, they’re now paying at most $300 and even that is pushing it. Not to mention spending on Groupon vacations. Then there’s services. Who’s spending money on music or TV when one could just subscribe to every album ever released and large programming backlogs for $10 a piece?

        1. J. Money September 10, 2016 at 3:50 PM

          Good point! I literally just threw about 20 CDs and 6 cassettes into my donation box two hours ago.. Though I’m barely over the millennial cut-off, as evidence of me still owning tapes :)

  3. Jon @ Be Net Worthy August 26, 2016 at 6:09 AM

    It’s actually comforting to me, a proud gen-Xer, to see that Millenials are taking a cautious approach to credit. It can be such a mess for people until they get their financial house in order and mature financially as well.

    Once they have control over their finances and are no longer at risk for going on a credit card binge, I do think they need to take a more “sophisticated” approach and break out the plastic.

    Like it or not, it’s what adults do. It’ll build your credit so you can borrow money to buy a house later and you do get those freebie points.

  4. Brian @ Debt Discipline August 26, 2016 at 6:13 AM

    This is great news if 44% of millennials don’t have credit cards and are using cash for major purchases. I’m right there with you, stay debt free over a good credit score any day.

    Use credit cards, credit score, rewards, etc as tools and live with in your means. Interesting that there is no mention of cash savings. That the other piece of the puzzle too.

    1. Claudia @ Two Cup House August 26, 2016 at 9:34 AM

      Agreed. Turning 18 doesn’t mean everyone has to run out and apply for credit cards. I’d take debt freedom over credit card rewards. Millennials taking a slower approach, thinking through major financial decisions, likely means taking longer to establish their credit scores. Kudos to the financially-thoughtful millennials out there!

    2. J. Money August 26, 2016 at 9:52 AM

      YEah!!! No mention of spending more with credit cards at all – something I’m sure was purposefully left out ;) (And which I accidentally left out – even more ammunition, d’oh!)

  5. Thias @It Pays Dividends August 26, 2016 at 6:28 AM

    Haha this sounds exactly like a study that would be done by a bank….who makes money whenever people take out debt or use credit cards! This just shows you how messed up things are – millennials are actually making good debt decisions because they have seen what it has donw to their lives and their parents lives and people are complaining about it!

    Nice takedown J$! The press release is ridiculous!

    1. J. Money August 26, 2016 at 10:00 AM

      Thanks man :)

      It’s not unlike the financial crisis when the gov’t and businesses wanted everyone to keep on spending $$$ instead of saving it to weather the storm. We even got “stimulus” checks to put back into the economy, remember? And people wonder how all these years later we still suck at saving money. And then get criticized for it.

  6. Francis August 26, 2016 at 6:33 AM

    I feel you, J Money!

    I know that credit cards offers a lot of benefits but rewards are not what’s going to get me wealthy. I don’t think that’s how the wealthy got there.

    Pluse, what good is credit score if you’re income to debt ratio prevents you from utalizing it?

    Good for you millennials. Keep using cash, and utilize credit card only when its convinient for you, not because of some credit card company forcing it on you.

    1. J. Money August 26, 2016 at 10:01 AM

      “I don’t think that’s how the wealthy got there.” Haha…. that’s some truth right there.

  7. Vicki@Make Smarter Decisions August 26, 2016 at 7:11 AM

    I’m all for folks not using credit cards until they absolutely have a handle on their finances and their spending behavior. My just turned 20 year old is getting offers in the mail every day now (I thought there was some rule about being 21???) And on the front of the envelope it sometimes says “Start Building Your Credit Score” (I guess it’s a better message than “get a cool frisbee” like I got in college when I signed up…) But dangerous message that needs explanation to young adults.

    1. J. Money August 26, 2016 at 10:04 AM

      Ugh, for real…. At least they banned card companies from coming onto college campuses now! I def. signed up for one for a free t-shirt :(

  8. Roy Largo @ Band of Savers August 26, 2016 at 7:17 AM

    You know what I would like to see, the stats to the same questions answered by the people administering this study. How many people on this marketing team do you think are swimming in debt and hate themselves for it? How many of them actually would rather have a high credit score than $0 in debt? How many of them are just hypocrites looking to pack their own wallets by writing this newsletter just to make a few more sales? They word it like they are just looking out for our future but how many actually care about the well being of the millinials or would loose sleep if they knew that they just helped to ruin someone’s life by entangling them in their snares?

    1. J. Money August 26, 2016 at 10:27 AM

      I don’t think you need a study to answer that one ;) It’s all profit over people for most places. Imagine if you turned all that towards GOOD like some are though?? Man… what a world our place would be.

    2. superbien August 26, 2016 at 11:59 AM

      Agreed that the people working at TD Bank who did this study are likely not too financially secure. I got that whiff from it too – entry level ramen eaters trying to write above their knowledge base.

      Unlike you, I don’t read evil or greed, I read ‘schmo with a job doing the best s/he can’. Sometimes you do a job that’s not what you would ideally do (avoiding the truly sleazy, which this isn’t.) I can imagine doing this job before I got financially savvy, just glad to have a job with pay and benefits.

      1. J. Money August 28, 2016 at 3:32 PM

        Interesting… Considering it did come from their PR vs TD itself, you could be right on that one. Especially since it sounds like exactly what TD would WANT to get across, just not so blatantly like that. Makes them look bad, regardless.

  9. Free to Pursue August 26, 2016 at 7:18 AM

    This post made my skin crawl. They don’t even realize what they sound like! Wow! Here’s my take on Big Banks…not very different from legal drug dealing: they tell you your first hit is “free”.

    The Top 10 things Big Pharma and Big Banks have in common:
    1. They want to own us – cradle to grave.
    2. They don’t care about our physical, mental, or financial health.
    3. They indoctrinate us early in life through “education”.
    4. They’re disgustingly profitable.
    5. They have the government and the law on their side.
    6. They’re consolidating at an alarming pace.
    7. Most of their products and services are “me-too”, limited-value products.
    8. Their success depends on secrecy.
    9. They spend more on marketing & sales than on any other activity.
    10. They won’t offer a cure.

    Here’s a throwback to the 80’s, just for kicks: This is your brain on drugs.

    This is your brain on debt. Any questions? ;)

    1. J. Money August 26, 2016 at 10:30 AM

      OMG that’s good.

      You better turn this into a blog post for your audience! :)

        1. J. Money August 28, 2016 at 3:28 PM


        2. Jenn September 1, 2016 at 4:29 PM

          That is a fantastic article – wow! Thank you – I’m sharing the link.

  10. Matt @ Optimize Your Life August 26, 2016 at 7:27 AM

    Nice. Credit cards can be a great tool…if you trust yourself to pay them off in full every month. The fact that they found that Millennials that weren’t using credit cards were afraid to go into debt suggests that they don’t trust themselves. You shouldn’t be pushing credit cards on people that don’t trust themselves with debt. Good on you for pushing back!

  11. Apathy Ends August 26, 2016 at 7:28 AM

    I am a credit card lover as well, they are a great tool when used correctly. But…… This survey is encouraging – Maybe we have a Millennial trend going and credit card debt per person may actually go down! Wishful thinking – but those are pretty awesome numbers.

  12. Matt @ Distilled Dollar August 26, 2016 at 7:30 AM

    Right on J$!

    I was going to defend CC’s but you did so yourself. I use CC’s personally to reap rewards, but I haven’t talked about them on my site because I’ve seen the damage they can do.

    It is VERY tempting to take those large transfer balances or to rack up debt for that item you absolutely have to have, right now. They are a very dangerous tool, and need to handled with the utmost care and respect.

    1. J. Money August 26, 2016 at 10:34 AM

      Totally. I don’t hate against credit card use at all when used responsibly. We just all know that most people can’t handle them well and garbage like this just pollutes the environment more :(

  13. Colin @ rebelwithaplan August 26, 2016 at 7:34 AM

    I use and love my credit cards but can definitely see how easy it is to slip into credit card debt. Being debt free is way better than good credit. I remember I was first encouraged to get a credit card by my bank when I was 18 years old. They tried to entice me by giving me…get this…free cookies and a free t-shirt…
    I guess they were trying to appeal to the typical broke free-seeking college student. I didn’t accept.

    1. J. Money August 26, 2016 at 10:35 AM

      Haha sounds about right :)

      I, unfortunately, DID accept to my free t-shirt, *hangs head*

  14. Mr. SSC August 26, 2016 at 7:47 AM

    That reminds me of a story from Laurie at Frugal Farmer, who used to work at a bank and one of their promotions was t-shirts, signs, and banners all proclaiming “Better living through Plastic!”

    Good for the Millenials for not falling into the debt trap as easily as most. I got sucked into it, and That TD study and write-up sounds like a dealer almost. Come on, just a taste – then you can make even more big purchases, it’ll help you out later on when you want to make even more bigger purchases, you’ll like it if you just try it, it’s so easy… hahahahaha

    1. J. Money August 26, 2016 at 10:39 AM

      Haha… Exactly what Free to Pursue above said! Check out her comment on The Top 10 things Big Pharma and Big Banks have in common :)

  15. Beks August 26, 2016 at 8:00 AM

    I got my first credit card my freshman year of high school, and didn’t know how to properly use it. I currently don’t have any while I’m working to pay down a debt I owe, but am considering getting one for miles after that. Using credit honestly scares me because of how easy it makes purchasing, but there are definitely advantages. One of the things they should teach in high school is that credit cards aren’t plastic money, but a loan. So many young people don’t get that.

    1. J. Money August 26, 2016 at 10:40 AM

      Good for you for staying away until the debt is gone!! That’s really hard to do – especially if you’ve already got used to using them! I’d imagine it’s easier if you’ve never experienced them before.

  16. geckovision August 26, 2016 at 8:06 AM

    woot! go millennials!

  17. Maria August 26, 2016 at 8:13 AM

    A good credit score is crucial for buying a home or car so using a credit card and paying it off monthly is smart and important. However, debt can snowball very easily and Millenials are more likely to be saddled with student loans and jobs which may not pay much starting out. It is so sad to have $60,000 of student loans after obtaining a Masters Degree in Physical Therapy when Millenialst could obtain a free college education in some countries in Europe or even Costa Rica!

    1. J. Money August 26, 2016 at 10:43 AM

      I know :( The whole college costs thing is getting pretty ridiculous over the years. At least everyone’s picking up a degree to show for it though vs nonsense! I know people like to hate on them, but they really do give you a huge edge over those who don’t. Which helps you for the rest of your life – even if you go into a different field.

  18. Amanda @centsiblyrich August 26, 2016 at 8:20 AM

    I think this says something for Millennials! I like that they are moving away from the trend of thinking of debt as just a fact of life. This type of thinking put me under a pile of debt from college and throughout my 20s.

  19. Latoya @ Femme Frugality August 26, 2016 at 8:33 AM

    Forget a credit score, I’ll take some of that debt free, please. And as a millennial, yes I’m quite aware of all of these “perks”, but I’m lazy and unorganized. I know if I used my card to pay for all of my bills etc just to get cash back that I’d eventually end up paying interest on some of these purchases. This is the exact reason why I use my card sparingly as possible because my nature, of course, already let’s me know that it’s a trap to make me end up paying more than I needed.

    1. J. Money August 26, 2016 at 10:44 AM

      Congrats on knowing yourself well!

      1. Amy Hanselmann August 28, 2016 at 3:22 PM

        I think the whole knowing yourself is key. When I was in college I had a credit card that I usually ignored. But then I bought a bunch of stuff with it and didn’t finish paying it off for 4 years- and it was on 1500 dollars!

        Now that I’m almost 30 I know to pay off my credit cards in full every month. I learned from my mistakes, but I’d rather other people not have to make those same mistakes to be credit savvy.

        Mint.com shows you how much you’ve paid in fees on each of your accounts (which is awesome/super depressing). In the years it took me to pay off that card (I ABSOLUTELY had enough money to pay it off I just didn’t do it) I racked up 1000 dollars in fees.

        Not at all worth the 1.5 percent cash back.

        1. J. Money August 28, 2016 at 3:33 PM

          Ouch! Better to learn it then than later on purchases 10x as big :(

  20. Paul August 26, 2016 at 8:56 AM

    I was always taught that building credit is necessary for life, BUT never spend more than you have and NEVER carry a balance. I understand the apprehension toward credit, its scary at first, but if used responsibly can put money back into your pocket. *I try to pay for Christmas each year with just reward dollars* That being said, I wonder if there are times I would spend less if I didn’t carry my credit cards with me.

    Also, my gut reaction is that while only 17% of millennials use a credit card for big ticket items, I’m thinking a large portion of the remaining 83% just aren’t buying anything as opposed to saving up for those big ticket items. Which is probably a good thing, because if something is truly a need you’ll find a way to get it regardless. I suppose its a nice way to cull all the excess junk in a persons life before they have a chance to accumulate.

    Instead of going the credit route, I have thought about opening a second checking account specifically for non recurring and variable expenses (i.e. groceries, amazon, walmart, etc…). That way I could make certain I had enough for recurring bills (i.e. mortgage, phone, internet, etc…). Then if my wife or I went to walmart and got declined because weren’t paying attention it would have no effect on the mandatory bills we pay. Also, in the event our card number was stolen it wouldn’t mean our mortgage went into default.

    I refuse to use a charge card because I don’t think I should have to pay a fee to american express for that. They make money on each swipe, annual fees are just a BS money grab.

    1. J. Money August 26, 2016 at 10:47 AM

      YES!!! Great idea with the opening a “bills only” account! That’s what we did when my wife and I first got engaged, and then overtime it became the main “house fund” for everything. But looking back it was nice to have the necessary stuff separated out from all the extras.

      Also, good observation on the “less stuff” buying too – that always crossed my mind and from the studies I keep seeing, seems like the younger gen. is def. more minimalist in that regard! Which is awesome!!

      1. Paul August 26, 2016 at 1:41 PM

        Yeah, if I did that I would have to have a separate account. I know your insured like a credit card is against fraud but the pay back for bank accounts is not always immediate. Some banks require police reports before they will issue you a provisional credit. I have also heard of people not getting money back for months. Using a credit card the refund is much easier. They just reverse the charges and issue you a new card, case closed.

        I’ve been really thinking about it recently as I much prefer the pay yourself first, spend whats left method to budgeting. I really don’t like being so granular with budget categories. Mint helps with that a lot but that’s also contingent on both my wife and I taking 10 seconds to open the app to see what we have left to spend when we are at target or the supermarket. I’m really becoming much more interested in simplifying, I think it would help my wife stay on track too since spending on a debit card is “real money” and to some people credit card don’t have that same spending feel to them.

        1. J. Money August 28, 2016 at 3:35 PM

          Or you can go old school with the “cash envelopes” and once you don’t see anything left in them you’re done spending :)

  21. Lisa O August 26, 2016 at 8:57 AM

    Sounds to me like the “big bank” is worried they won’t make their millions!

    I have one of those kidos that just doesn’t believe in credit cards. When he bought his new computer he took out a bank loan to help with his credit…he also had his automatic payments come out of a savings account that already had the money saved for that computer. His interest rate was 1.5% and no payment was ever late.

    I use credit cards for everything, I love the rewards of the upward of $700 a year into my income. I pay them off every period and never pay a service fee. Best part my bookkeeping is done for me every month with a statement :)

    1. J. Money August 26, 2016 at 10:50 AM

      Both of you are rock stars :)

      1. Lisa O August 26, 2016 at 11:16 AM

        Thanks that made me giggle…..

  22. Ty @ Get Rich Quickish August 26, 2016 at 9:35 AM

    Only recently did I develop the discipline to use a CC responsibly, but banks don’t want disciplined, responsible card holders. They want the opposite – someone who will max out their limit, make minimum payments, and occasionally pay late and incur a penalty. Good job, Millennials!

  23. Samantha Allen August 26, 2016 at 9:51 AM

    Well I guess I’m one of those 44% millenials! WOOT! Go us!

    Honestly, your take is spot on. I know what we’re thinking – avoiding the pit of debt is WAY more important than building this mysterious “credit score” just so we can rack up loads of debt in the future. The whole thing feels like such a scam. Can you imagine that working for any other product a company is trying to sell you? We are practically begging them to give us credit. Even the term “credit” sounds so nice, like something everyone would want, when in reality it just means DEBT!

    1. J. Money August 26, 2016 at 10:52 AM

      And the crazy part? Credit cards have only been around since the 1950’s and have already done such damage in the relatively short amount of time. We did fine without them for hundreds/thousands of years!

  24. Ms. Liz August 26, 2016 at 9:59 AM

    What a great way to start my day–I feel better about our country’s future! Thanks for this J$!

  25. Linda @ Brooklyn Bread August 26, 2016 at 10:11 AM

    OMG good for you for posting all that! Ugh, where to begin?! I love how they don’t mention that they only make money when people go into debt and that making money is the reason they exist. As if they want everyone to reap the rewards, with none of the expense. It is so much worse when companies try to pretend that their purpose is something other than… making money! I do use a credit card for everything now that I am out of debt for the rewards but that opportunity ONLY exists because credit cards are a trap and so few people are able to use them that way. Anyway – pity the poor PR person that had to write that and send it. I feel their pain. I’m sure they will go home and pour a large drink, while they figure out how to pay their credit card bills. : (

  26. Joe August 26, 2016 at 10:16 AM

    It’s awesome that millenials aren’t taking on debt. If they can keep it up, they’ll be a lot better off than the previous generations. I wouldn’t worry much about credit score. I’m sure it will keep improving as they age and buy more stuff. Banks are scummy. :)

  27. Fiscally Free August 26, 2016 at 10:28 AM

    It’s obviously good to avoid debt, but I think the benefits of using a credit card are too hard to ignore.
    It’s not hard to avoid excessive spending on a credit card. It’s not like having a card automatically means you are going to go buy a new Jet Ski every weekend. With just a tiny bit of self control your spending can be exactly what it would be if you paid for everything with cash.

    As silly as it seems, the point about budgeting hits home for me. I am very thankful all my spending is automatically logged and categorized when I use my credit card.

    1. J. Money August 26, 2016 at 10:53 AM

      If only everyone had as much self control as us $$ nerds do :)

  28. Dollar Engineer August 26, 2016 at 10:37 AM

    I get what you’re saying J$, but I also think it is important to establish credit. As a millennial myself, I have a pretty good credit score and it’s from just making sure I pay all my bills on time and in full every month. I like to use credit cards and treat that spending as cash. A good strategy is to pay off your credit card each week if to make it seem more like a cash payment.
    On the flip side though I absolutely understand if some people don’t feel responsible enough to handle a credit card then I definitely get that.

    1. J. Money August 26, 2016 at 10:54 AM

      No shame in that at all! You’re getting the best of both worlds which is the ultimate route :)

  29. Bobby Hoyt (M$M) August 26, 2016 at 10:37 AM

    I’ve been getting a bunch of those lame press releases lately. I just ignore them…but this is a pretty badass strategy too haha

    1. J. Money August 26, 2016 at 10:56 AM

      It takes a lot to get me riled up, but every now and then one of them succeeds :) Probably not good if you’re trying to be friends with the banking world though, haha…

  30. Miss Mazuma August 26, 2016 at 11:02 AM

    Every generation wants to think the next generation will cause the sky to fall. Not so.

    It seems to me that many Millennials are just more aware of their personal finances and have learned not to rely solely on credit. It is devastating the way that kids at 18 heading off to college sign themselves into some of the worst debts due to student loans without understanding the full meaning of it. Many also witnessed what the bank and housing market crashes did to their parents. Losing houses, losing jobs, losing retirement savings. That’s enough to make anyone a bit trepidatious.

    I still believe establishing credit is important in the long run. You just never know what is in store in the future. That being said, I am a firm believer of not writing a check your butt can’t cash. Use your card, pay your card. Every month – in full. That way if you do encounter an emergency you are well equipped to handle the financial burden should you need to. :)

  31. Larry August 26, 2016 at 11:10 AM

    I have not read all the comments but it seems that most think that the use of a credit card leads to debt. I would challenge that concept. If you pay each and every card off every month, you are not incurring any debt. If used to pay for almost everything that you normally buy, you can get the benefits. Case in point – just got 40,000 points on Capitol One by charging $3000 in 3 months. And paying it ALL off. I use credit so often, I rarely have any change in my pocket. However, I do have a rating of almost 850. So, claim your rewards, build your rating and do NOT incur any debt by paying them off every month………….just my two cents

    1. Ben August 27, 2016 at 10:02 AM

      I have nothing to gain from endorsing the use of credit cards but I would agree with Larry here.

      If we’re on the topic of endorsing fiscal responsibility, then its irresponsible to not take advantage of benefits of CC use IF you’re a financially disciplined person (not saying everyone fits this description- I think we can agree this is clearly not the case for some users).

      But users acting like CC use is the end-of-the-world type scenario/”stay away from them” blah blah blah…just no.

      I am also of the opinion that the 44% of millennials that aren’t using CC’s aren’t doing so because they made a conscious decision to NOT wrack up debt (this coming from a millennial).

      I think research would find that this has more to do with lack of education/general knowledge that is taught to school-aged children when it comes to personal finance and how to use/apply for credit cards appropriately (kudos to Ryan below for raising awareness regardless of the subject matter).

      Be smart. Take advantage of the CC companies trying to take advantage of you. Reap their “rewards” and say thank-you each time that you redeem them. Easy.

      1. DEC1 August 27, 2016 at 9:49 PM

        Agreed on all points Ben…and similar to the thoughts in my post below. I’m not sure I saw your post before I wrote mine…yours may have been in limbo waiting for moderation.

  32. Ryan C August 26, 2016 at 11:20 AM

    Where can I get my hands on this press release?

    I teach a high school personal finance class and would like to show them this press release and build a class discussion about your rebuttal to the main points. Thanks!

    1. J. Money August 26, 2016 at 11:42 AM

      HAH! Awesome!

      I’ll email it to you right now :)

  33. Erric August 26, 2016 at 12:58 PM

    Why do you actually need a credit score, if you are not going for debt or loan? There is no doubt that a debit is worse than a bad credit score. Debit is like slow poison. One must avoid debts and your credit score is up.

  34. kg August 26, 2016 at 1:10 PM

    I think it is very important to live within your means, so if that means no credit cards for some people so be it. Good debt is for assets that pay you money every month like rentals where your tenants pay your mortgage, taxes, and insurance. Bad debt is when you use credit to finance something you can’t afford like vacations, fancy toys that don’t give you money but instead cost you money. We use the old fashioned clipboard method where we put our paychecks on the board and subtract our expenditures. If we get to $0 we can’t spend anymore money that week. We record our monthly allowances on the clipboard too. We also record our monthly savings on the clipboard where we put money away each month for taxes, insurance, medical expenses, and vacation. In the old days we used to use cash in envelopes and that worked too. I watch the banks very carefully to make sure they don’t steal our money via unjustified fees and of course we pay our credit cards off each month.

    1. J. Money August 28, 2016 at 3:40 PM

      Yeah old school! I’m a big fan of not automating everything too, just for the simple fact that you don’t pay attention as much (at least with spending/budgeting – I’m all for auto deposit and saving/investing ;)). Gotta figure out that perfect balance of convenience vs best for your wallet.

  35. Josh August 26, 2016 at 6:01 PM

    I’m a millenial. Let me tell you what millenials just loooove – pretentious credit card companies telling us what we need to do and selling us on the same game our parents and grandparents bought into.

    Word’s gotten around at their nasty scams offering points and other things when its proven that makes people (in general) spend more than they would have otherwise. Also after 2008/9 they should be luckily we trust them with our money at all.

    Thank you for offering a different voice! Hopefully they’ll listen.

    1. J. Money August 28, 2016 at 3:40 PM

      Hah! Preach!

  36. Leanne August 26, 2016 at 9:36 PM

    I just passed on this post to my 24 yr old nephew who responded with “Budgets are not just sexy, they’re smokin’!”

    1. J. Money August 28, 2016 at 3:42 PM

      You’ve got an astute nephew ;)

  37. Crystal August 26, 2016 at 11:48 PM

    This is as bad as people writing me to explain how stupid I was for paying off our first house because of the tax benefits I don’t get for that mortgage interest. Hello?! 15-35% (tax rate) cash back on an actual expense is worse than 0% cash back on $0 spent. MATH PEOPLE. Credit cards are awesome but if you think you’ll abuse them, avoid them like all hell!

    1. J. Money August 28, 2016 at 3:43 PM

      Oh don’t even get me started on the mortgage lovers… Their banks must LOVE them!

  38. Mr. Compounding @ Net Worth Is King August 27, 2016 at 12:10 AM

    TD is making matters worse. If millennial were to change their minds about credit cards, it wouldn’t be because a bank told them to do so. They don’t trust banks!

  39. ZJ Thorne August 27, 2016 at 11:41 AM

    You are spot-on! This press release screams The Bank Needs More Money Off Of You! They are not trying to help folks here.

  40. DEC1 August 27, 2016 at 11:57 AM

    Great thought provoking post as usual J$
    How about a slightly different perspective? (and no, I don’t work in the financial industry)
    > Don’t own a car if you don’t know how to drive and manage all that involves
    > Don’t have a gun if you don’t know how to handle it
    > Don’t drink if you can’t do it responsibly
    >> And don’t get a credit card if you’re not prepared or mature enough to PAY IT OFF every month as if your life depended on it.
    The sad truth is all those “smart” millennials that appear to be going the cash route are going to wake up and realize at some point in the future that they can’t buy a home or start a business or buy a car because they have no credit rating or one that won’t allow them to buy that dream home they now realize they want/need. I think it’s unrealistic to say or assume that any of the above can be purchased without borrowing.
    So how about being smart about credit and use it to your advantage rather than letting it run you into the ground? If smart is knowing what you can’t control, in terms of urges, then so be it…but I’m just not sure lack of discipline should be considered “smart”.
    Both of my grown millennial kids have a credit card that I suggested they get for all the right reasons (not because the credit card companies “told” them to)…and they pay them off in full each month, reaping the rewards of cash back, miles, tracking, etc. while they build credit for that day in the future when they WILL need a credit rating to buy that home or car that it simply isn’t feasible to pay for by cash.
    I just find it a little difficult to pillory the credit card companies and represent them as pure evil when they are in business to make money like most of us are in our respective industries.
    I would suggest that the millennials that are reading this blog are the exceptions rather than the rule (and kudos to them for taking charge of their financial futures)…and I will understand if they have issue with this reply but there are MANY more out there that are just plain apathetic (and contribute to some of the TD Bank stats) and/or aren’t getting the right advice and direction…and they will be the ones that will be surprised and disappointed that they didn’t take control of their financial lives sooner.

    1. J. Money August 28, 2016 at 3:56 PM

      I think you give the general public more credit than they deserve (no pun intended!), but yes – in general I agree with you :)

      In a perfect world everyone would be taking advantage of ALL financial tools at our disposal and making smart responsible choices all the way. Credit is def. important and will serve you well in life, but I still wouldn’t ever put it over getting into debt. – which stats show time and again that most Americans will fall into, and in no short part due to credit cards.

      I don’t think TD or other banks are necessarily evil – we all use and need banking – but I’m not a fan of all the ways they try to market their products – esp credit cards – and this example being one of them. As Superbien stated above in the comments, there are much better ways to convince non credit holder millennials to try a card than scaring them (or making them feel like idiots) for not picking one up.

      So mainly my rant is on marketing practices than the tool itself… And to your point up top about it all coming back to the *person* using it who has control, I fully agree with that as well! If you can’t drive/drink/shoot/or even have sex responsibly, then you shouldn’t be doing it ;)

  41. Erika August 27, 2016 at 3:50 PM

    Wait, isn’t making student loan payments on-time another way to build credit? I find it interesting that they mention that most millennials have battled student loan debt (“battled,” as if most of them have paid it off — I have dozens of friends who are STILL paying student loan debt and will be for years…) but ignore the fact that student loans themselves are a line of credit…

    Granted, I’ve had a credit card solely for the purpose of building my credit since I was eighteen, so maybe student loans don’t help one’s credit score that much by themselves… I don’t actually know. Still, though, I completely agree with you that it’s much more important to do what you’re comfortable with and not let a company who’s primary purpose is to make money from loans & credit card interest to bully you into doing something that you don’t want to do financially. I trust myself with a credit card, because I know that I’ll never make a purchase on it that I can’t pay off right away. That’s simply not the case with everyone, and that’s okay — in fact it’s GREAT — if you know you aren’t a person who can do that responsibly and thus don’t take the risk!

    1. J. Money August 28, 2016 at 3:57 PM

      Totally – paying off student loans (or any loans, for that matter) on time will def. help with building credit history. Credit cards are just one way to also do it (albeit a pretty powerful/easy one) which is why most of us focus on that over others… But other things too like utilities in your name, cell phones, etc all help raise your score if paid attention to properly.

  42. Jason August 27, 2016 at 11:26 PM

    Most of my students are fairly debt averse. Most work 20-30 hours a week as they try to pay for their education and I try to convince them at all costs not to even mess with student loan debt if they can swing it. My new mission is to save them from the mistakes I made. Some don’t listen, but we have started a new financial literacy project that is going over well. The whole credit score myth is something we need to blow up.

    1. J. Money August 28, 2016 at 3:58 PM

      Nice! And at least for those who don’t “get it” right away, you know they will once they start paying them back :) There could be worse things to go into debt for than education!

    2. Booboo Bear September 12, 2016 at 2:18 PM

      There are plenty of studies that show that students who take on loans instead of working part time while in college are more likely to graduate. I realize that many students attend institutions where graduation rates are less than 50% and this can be a big risk, but I’d suggest (and I do suggest it to students that I advise) that a student who’s made it through a couple of years of college with good grades in a major with reasonable job prospects consider taking on loans so that they can graduate more quickly.

      1. J. Money September 13, 2016 at 3:52 PM

        Interesting take…

  43. Jayson @ Monster Piggy Bank August 28, 2016 at 5:51 AM

    Of course. I’d rather have no debt than a good credit score. Having no debt could give me stress-free life and would enable me to start having a good credit score.

  44. Credit Report Guy August 28, 2016 at 8:15 AM

    Millennials do seem to get it. They are cutting the cords on expensive cable tv and using streaming services like Netflix for $9 per month instead. My daughter is in her early 20s and I know she has never had a credit card. Uses her debit card (cash) for everything. Consumer debt is dumb and cash is king.

    1. J. Money August 28, 2016 at 3:59 PM

      You’ve raised a smart daughter :)

  45. Tissue King August 28, 2016 at 6:05 PM

    There’s a lot of information out there about the millennial’s and how much credit they are using. Some blogs and podcasts talk about what huge debt they’re in from college and then we get information from TDBank about the millennial’s not taking any debt. I wonder what the real truth is.
    I hope they’re smarter than my generation and they are staying out of debt but when you start to build a family, we all seem to fall prey to our own stupidity.

    I say use the cards to benefit yourself but don’t let them run your life. If you can’t afford the payment don’t use the credit. Be patient and save like a madman and then put it on a card and pay it right off at the end of the month. Cash is King, of course that’s after you benefit from the purchase through a miles, cash back or a hotel points gain.

    1. J. Money August 29, 2016 at 10:24 AM

      I think the TD study was all centered around credit card debt than any others since the stats on *college* debt is def. pretty horrible :(

  46. Millennial Moola August 28, 2016 at 10:39 PM

    You’re not off base at all. Credit isn’t important if you have good money management and financial skills. Most good credit cards just want you to have over a 700 or something like that so the returns from excellent credit really arent all that good.

  47. Pete August 29, 2016 at 8:47 AM

    Gotta love the marketing machine! I have a credit card I pay off fully 3-4 times/month because I don’t have and will never incur consumer debt. I recently tried to up my limit to a higher number to purchase a few big ticket items (to be paid for in cash the following day) so I could earn the rewards. Can you say free honeymoon!?

    Anyway they actually DENIED my request to increase my credit because I don’t use my credit enough. I spend approximately $1500/month on the card as I run everything through it, I just never carry a balance. Good for me, not so good for their bottom line. I called the CS rep at the company and questioned their reasoning and wanted them to explain the paradox of me not being able to increase my credit limit so I could use more credit because I don’t use my credit enough…….

    1. J. Money August 29, 2016 at 10:30 AM

      What did they say about it??

      I wonder if you can use the same reasoning with the “upping it for future bit purchases” bit to get it permanently raised? I’d call again and ask for a supervisor as they should at least be able to raise it a little if not too high. I do the same thing as you do (only we were spending around $3,000 a mo I wanna say when we raised it?) and got *both* our cards raised by like $20,000 each to get our credit score higher. Sometimes it helps just talking to a different person (and one with more authority :)).

      Another route of course is that you can open up another card too and just use it every 6 months or so but it’ll at least get your utilization improved.

  48. Pengepugeren August 29, 2016 at 9:49 AM

    We recently got our first credit card, so we can cash in on those delicious flyer miles.

    We only use it for regular expenses and pay in full every month. Yet I do get a slight uneasy feeling in the stomach when looking at those red numbers. It just feels bad to use credit.

    1. J. Money August 29, 2016 at 10:31 AM

      Brave! :)

  49. Steve @ Studentloansoldier August 30, 2016 at 4:00 PM

    What good is a credit score if you’re drowning in debt?

    Pay off the debt, save money and pay for what you want in cash!!

    ….well, maybe just pay the debt. If I was debt free I would be very averse to getting back into debt, even with a mortgage. Then again, if I was debt free I’d have a much different perspective. It all depends on your situation and lifestyle and what you’re comfortable with. As long as you’re financially responsible I don’t think there’s a wrong answer!

    1. J. Money August 31, 2016 at 10:18 AM

      Yup! I didn’t think I’d ever take out a car loan again after being debt-free for years, but then I decided to because it just made the most sense in my current position. Only difference is I now actually know what I’m doing unlike all previous loans I’ve taken out! :)

  50. Beth September 2, 2016 at 7:57 AM

    The beautiful thing to me about this article is that I see the possibility of a new trend starting. If that many people are avoiding the soul sucking traditional ways of establishing a credit history, underwriters will be forced to find new and better ways to establish credit worthiness when they do decide to get into debt to make those big ticket purchases. That would be a big win for all us consumers!

  51. AJ September 2, 2016 at 11:13 AM

    I almost never carry cash and I use a credit card for basically all my purchases, however, I’m diligent about keeping a budget so I know where I’m at with my spending and I pay the thing off in full every month. For this scenario, the extra benefits that a card provides are great!

    However, I wasn’t always this disciplined. There was a time in my early to mid 20’s where I carried balances on a number of credit cards. I learned my lesson and got away from this debt, but would it have been better if I would have taken a more cautious approach to credit and never got in over my head in the first place? Absolutely. Experience is a pretty good teacher, but learning from someone’s else’s mistakes and not your own is even better :)

    1. J. Money September 2, 2016 at 3:16 PM

      Truth :)

  52. Jen September 3, 2016 at 7:41 AM

    As a”millennial” I do see a distinct split in our generation. My fiance and I each got the $300 starter credit card when we went away to college (back when it was legal to sign up all the 18 year olds at orientation). By 27 his limit was still $400 because he never used it and mine was $15k because I used it all the time including work travel expenses. The mentality that you need to pay by cash or get devoured by debt is a cop out in my opinion. i think there are a lot of millennials paying cash to avoid debt but that also don’t have the credit that they could take out an emergency loan if they ever needed it. Also, the idea of paying cash for a house in this financial market is short sighted. At all time low interest rates someone would be much better off to invest that money long term and profit on the difference between the market growth versus the interest.

  53. Sharon September 3, 2016 at 11:12 AM

    I had a friend who was cash only. He actually owned a house that he paid cash for when he was in his 30s. When he moved to another area he needed to get new car insurance. The insurance company wouldn’t insure him because he had no credit score.

    Most people can’t afford to pay cash for a house. It is necessary to have a good credit score to get a good mortgage rate. Cultivating some credit is necessary in this day and age. One of my kids got a low limit credit card around 18. Never used it for anything she couldn’t pay for but she did use it and string payments out for about 3 or 4 months periodically. Got her limit upped regularly. Bought a car for 0% interest and has made all of her payments on time. Just bought a house and got a good interest rate due to her excellent credit score.

    Sadly, credit scores are a requirement in life but it doesn’t mean you can’t be responsible about your debt.

    1. J. Money September 4, 2016 at 3:29 PM

      I’m not sure about it being a requirement, but it def. makes things easier having a good one :) The perfect world really is being responsible with cash and credit and maximizing all the rewards each tool out there gives you.

  54. Dr. Wise Money September 8, 2016 at 8:37 AM

    i’m all about living well below my means.
    i also agree that financial literary is power.
    mindfully using credit can definitely help with reducing debt and even building net worth.
    there was a time when my school tuition was way too expensive and my 2 jobs while in school was not enough to cover my tuition alone, so i used 0% and cash reward credit cards to help me minimize debt (in addition to frugality and working while full time in school), it actually helped me saved 30k of student loan interest (60k if i were to borrow as much as what the cost of attendance my financial aid office suggested).

    now i’m making income and not paying tuition, i still use credit cards to re-direct my cash flow for savings and making cash rewards, but the key is i never pay a dime of credit card interest.

    here’s how discover it saved me 1200 of 4000 grocery bills.

    1. J. Money September 10, 2016 at 4:02 PM

      True true…. Not going to argue with you about the power of knowledge.

      But how do you know these millennials haven’t done their own research and consciously came to the conclusion that these cards aren’t for them? From the looks of the stats, it’s pretty telling that they’re very much aware of how credit cards work and are choosing not to buy into it. Hard to fault them for that.

  55. Meghan September 8, 2016 at 12:57 PM

    I think it’s smart to avoid a situation that you KNOW Is a bad deal. A dark alley with rabid dogs hanging out in it…. bad idea. We know that. However, “Hey – I’m not going to that place because it’s new and I’m afraid” is a TERRIBLE reason to not do something. Education and knowledge are key here. I recently listened to the “Adulthood Made Easy” Podcast episode on Millennials and credit cards.http://www.realsimple.com/work-life/real-simple-podcasts
    I was pretty upset at the panel that was presented… they admitted zero to negative knowledge of how to pick/get/use credit cards. (Like shouting at them in my car upset) And that’s not a reason to stay away from credit, that’s just being uninformed and staying in the dark – which is a TERRIBLE idea.

    So, if you know a millennial, help them educate themselves!

    1. J. Money September 10, 2016 at 4:09 PM

      Do the show hosts own credit cards?

      If not, see my answer above :) You wouldn’t know where to pick them up or find the best ones if you’ve chosen not to go that route (similarly to me knowing the ins and outs of whole life insurance because I’ve decided to go with Term instead).

      If they DO own credit cards, however, then yes! That is pretty bad!

  56. Giovina September 10, 2016 at 3:54 PM

    I think credit cards are a great tool, but only if they are used correctly. The only purchases I make on cards are ones that I have the money for in the bank, and I pay it off in full every month. I got my first credit card when I was 18, so now I have 7 years of history and 0 late payments. Getting the rewards is worthwhile to me, but I know some people can’t help themselves from seeing it as free money, which it isn’t. And paying interest is something I avoid at all costs.

  57. Jen @ Saving with Spunk September 11, 2016 at 5:53 PM

    THIS IS AWESOME! Stop targeting us, we’re just trying to get rid of our student loan debt right now ok? If we can get through that I think we’re pretty set in the “building our credit score” category.

    1. J. Money September 13, 2016 at 3:53 PM

      Haha – Agreed :)

  58. Booboo Bear September 12, 2016 at 2:12 PM

    Trailing edge boomer here. My wife and I have been debt free for about five years now. We’ve paid off all of our student loans, car loans, mortgage, and credit card debt and have a net worth (including home equity and retirement accounts) of about 7 times our annual income with 15 years until I retire. I’m finding it hard to imagine any circumstances under which we would ever need or want credit again. Is there any point in worrying about our credit scores?

    1. J. Money September 13, 2016 at 3:55 PM

      I guess it depends on your future goals and how good/bad your credit is right now :) You def. seem to be doing better than most of the country! Esp w/ that mortgage pay off – well done.

  59. Steven Goodwin September 24, 2016 at 7:32 PM

    nope, not off base at all. I’ve never been a big fan of credit cards myself. I think it’s funny when people tell me that they are just using them for the rewards. They think that they are winning, but I just see it as them being gamed into spending more to justify the rewards. If you can make the rewards on your main monthly bills alone, ok, I can see that. But, when was the last time you heard a wealthy person explain that the reason they are so wealthy is because they got the credit card rewards?

    1. J. Money September 26, 2016 at 4:34 PM

      Answer: NEVER