“Millennials of color are worse off financially” featuring University of Chicago Professor Cathy Cohen, a Black Star Member

It’s not that African-American and Latino millennials don’t want credit cards, it’s that white applicants are more likely to be approved, she said. And while not having a credit card can be a good way to not spend the money you don’t have, it also means not building a credit history.

“Without credit, you don’t build a record of credit management, and therefore when you are ready to do something like buy a house, it becomes more difficult to secure a loan, especially a loan with a decent interest rate,” Cohen pointed out.

One of the reasons that millennials of color are more likely to use these services is because communities of color are “banking deserts.”

“In African-American and Latino communities, you are less likely to have kind of the traditional banking establishments,” Cohen said. “Instead what we find are more predatory or costly banking opportunities in those communities. 

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