Millennials Need Credit Unions

Far too many millennials are being disadvantaged by a lack of basic financial literacy and the rapid accumulation of high-priced debt, according to a new study from FINRA. It sounds like they could use the services of a good credit union.

FINRA (Financial Industry Regulatory Authority) recently published a new study, The Financial Capability of Young Adults—A Generational View, which found that only 24% of millennials surveyed were able to correctly answer four of five questions on a basic financial literacy quiz. That dropped to only 18% among younger millennials (aged 18-26).

Perhaps it’s not surprising, then, that 46% of millennials surveyed said they had too much debt, or that 43% of them have engaged in costly non-bank forms of borrowing (pawn shops, payday lenders, etc.) in the last five years.

Knowing the pratfalls of high-priced debt – and understanding how to use credit wisely – are basic components of financial literacy. Unfortunately, most of the ‘help’ waiting for young people these days consists of come-ons from creditors eager to load them up with high-interest debt on lousy terms.

Younger adults need to have the best financial options made available to them, and they need to know how to manage their money effectively. Having a relationship with a not-for-profit credit union can help them to make the best choices, and to stay out of financial trouble. CUs give financial advice that is free of profit motives, and they usually offer the best rates on credit products such as car loans and credit cards.

Of course, what younger Americans really need is a strong economy that is producing lots of high-paying jobs. But today’s tight-money times make it even more vital that each member of this generation has financial professionals in their corner, who put their best interests first.