A recent survey by Credit Sesame found that in a group of 5,000 millennial women, 40% of them have a challenging time navigating the credit system, which naturally led to feelings of anger and shame.
35% of these millennial women indicated that their credit scores hurt them in life, significantly more than most Americans.
Distrust of credit card firms, the lack of knowledge, and the misuse of credit cards among this cohort drive a substantial wedge in the gender financial gap.
Nonetheless, there is hope for the African American community. According to research and surveys, it turns out that Black millennial women have the edge over their white peers when it comes to credit.
43% of women of color reported having excellent credit scores (640-850) when compared to white millennials.
Moreover, more white millennial women (30%) have poor credit scores than Black millennial women (18%).
The survey also revealed that Black millennial women have a higher probability of saying their credit score helps them (44%) than their white counterparts.
More women of color also state that they have a great experience with credit overall, and fewer are embarrassed about their credit score than white millennial women.
These numbers should spark a celebratory mood for Black women, who should pat themselves on the back for being good with their finances and credit.
That said, it’s not a fully rosy picture.
If you look beyond the credit scores, women of color are still struggling with finances, with more than 60% living from paycheck to paycheck and 24% being unable to keep up with their mounting bills.
In addition, over 40% of Black millennial women have found it challenging to access their first credit card.
They even find it tough to be pre-approved for these cards.
The survey also doesn’t consider the full picture. One of the most significant issues that it doesn’t look at is the Covid-19 pandemic and its effect on millennial women.
Before the virus brought the global economy to its knees, women were the lowest income earners, had fewer savings, and less access to social security.
Since the pandemic paralyzed the world, over 40% of Black women have been let go from work, and another 16% resigned due to childcare.
According to the Center for American Progress, without a substantial immediate and long-term plan to shore up childcare systems and formulate better work-family policies, the U.S can’t attain steady economic growth nor safeguard and improve gender equality.
Hopefully, things will get better, and Black women will be able to access credit cards and get the means to help them attain their financial goals.
Otherwise, having even the best credit of any demographic will mean little when it comes to the real world.