5 Ways Millennials Can Use Credit Cards to their Advantage Holly Johnson September 19, 2017 • 4 Minute Read Credit Cards Millennials may be the largest living generation on Earth, but that doesn't mean they don't face their share of financial hurdles. For example, millennials face higher levels of student loan debt than ever before, rampant unemployment or underemployment, an increasingly expensive housing market, and a world where owning costly gadgets and technology is the norm. With so much to overcome on their way to financial independence, today's youth should consider a multi-pronged approach to building wealth. If millennials hope to achieve typical milestones of the American Dream such as homeownership, for example, they need to focus on more than earning more money and minimizing debt – they should also focus on building credit. Fortunately, a new study from LendEDU indicates millennials understand this truth. As the research shows, 69.4 percent of millennial respondents said they wanted to build a credit history and almost 60 percent agreed they didn’t see credit as “scary.” Further, 52 percent of millennials said they had at least one credit card, which further proves that the majority of millennials are on their way. Related: Myth Busted: No, Opening New Credit Cards Won’t Bomb Your Credit Score 5 Reasons for Millennials to Get a Credit Card If you’re a millennial who is leery about getting a credit card, it’s important to research the potential benefits you could be missing out on. Even if your credit doesn’t seem important now, having good credit or poor credit in the future could mean the difference between being able to buy a house, finance a car, or borrow money to build a business – or being left behind. A credit card is often the best first step to a lifetime of positive credit history. Here are five reasons to cast your fears and doubts aside and jump in feet first: #1: Build credit for the future. The most important advantage you can gain from a credit card is having the ability to build credit history for the future. Once you have a credit card, your positive credit usage will be shared with the three credit reporting agencies – Experian, Equifax, and TransUnion. Each time you charge a purchase and pay it off, the credit monitoring agencies will take it as a sign that you’re responsible and creditworthy. Over time, enough responsible credit use will help you build a reliable credit history and boost your score. So, by the time you actually need good credit, you’ll be good to go. #2: Take advantage of important consumer protections. Credit cards offer more than convenience; many offer valuable consumer protections that can help you save money and protect your finances. Depending on the credit card you sign up for, you could be eligible for guaranteed returns, price protection that will refund you if you overpay for a purchase, and extended warranties on qualified products. Some travel credit cards even offer travel protections that can help you recover financially from certain losses. For example, you could qualify for trip cancellation/interruption insurance that reimburses you if your trip is cancelled or delayed for a reason outside your control. Other cards offer primary auto rental insurance for free, which lets you avoid paying for this coverage any time you rent a car. #3: Learn positive money management habits. Another way a credit card can leave millennials better off is providing the opportunity to learn positive money habits. By signing up for a credit card, individuals can learn smart financial habits such as how to use their credit card for small purchases and pay it off every month. While credit cards can absolutely lead to debt if you’re not careful, learning to use one responsibly is the best way to prevent debt from creeping into your life. #4: Earn amazing rewards. Millennials can score big by using rewards credit cards to pay for their spending and regular bills. The best rewards credit cards offer points for each dollar you spend, then let you redeem your points for statement credits, gift cards, merchandise, or travel. If millennials can learn to charge purchases like groceries, dining out, insurance, and utilities to their credit cards each month, they can easily score 1-5 percent back for every dollar they spend. The key to “getting ahead” with credit card rewards, however, is learning how to charge only what you can afford, then paying your bill in full every single month. If you pay interest on your purchases, the rewards you rack up won’t be worth it. #5: Score travel perks. If you’re a millennial who loves to travel, the top travel credit cards offer perks that can make your experience more comfortable and even more affordable. In addition to perks like trip cancellation/interruption insurance and primary auto rental coverage, come cards offer benefits such as airport lounge membership, elite status with hotel or rental car loyalty programs, or travel credits to cover checked bags or seat upgrades. While you can often pay for these perks on your own, many of the top travel credit cards offer them free as a benefit to cardholders. This is yet another reason millennials could benefit from a credit card; they can get all the other benefits of credit (i.e. building credit history, consumer protections, money management skills, etc.) while also gaining valuable travel perks. The Bottom Line If you’re a millennial on the fence about getting a credit card, it’s perfectly normal to worry. After all, some millennials have used credit cards irresponsibly and paid the price in the form of long-term debt or a ruined credit score that is difficult to repair. While there are many positive side effects to credit, there are plenty of downsides to consider, too. On the other hand, you’re in charge of your own destiny and you could be missing out on important advantages by avoiding credit altogether. Not only does this include the benefit of building a positive credit history you’ll need later in life, but it includes credit card rewards, valuable consumer protections, and travel benefits, too. Follow Us Here! #CreditCards Editorial Disclaimer: Information in these articles is brought to you by CreditSoup. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles. The information is accurate to the best of our knowledge when posted; however, all credit card information is presented without warranty. Please check the issuer’s website for the most current information.