HOBOKEN, N.J. – A recent LendEdu survey shows most millennials are using credit cards to build a credit history, but survey results show some practices could end up hurting them in the long run.
About 69 percent of survey respondents said they have a credit card because they want to build a credit history. But nearly 36 percent said they have maxed out their credit card limit. Credit agencies typically recommend not to exceed using more than 30-35 percent of the total credit limit.
The survey asked 500 millennial-aged individuals about credit card practice. LendEdu, an online marketplace for student loans, chose millennials because the demographic is more likely to have young credit histories and are more at risk of being significantly damaged by misuse.
“For something that can be such a useful and impactful tool, credit cards carry significant risks if not handled properly,” according to the survey.
The survey results showed some obvious signs of improper handling. For instance, 7 percent of respondents said they had five or more credit cards, and 5.6 percent believed their credit score would increase if a payment was missed or made late.
“This is concerning to say the least. One can only hope the constituency of respondents was not missing payments on purpose thinking they had the system beat,” according to the survey.
Nearly a quarter of respondents also saw their credit cards as a status symbol, which LendEdu warned against.
“Treating your credit card like a key to the upper echelons of society could lead to spending above your means and a mountain of debt,” according to the survey.
