Kevin O’Leary’s Credit Reality Check for Millennials: ‘There’s No Way To Game That System’
Written by
Laura Bogart
Edited by
Kristen Mae
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“Credit cards will kill you.” That’s a bold statement, but one that Kevin O’Leary, the investor, entrepreneur, and “Shark Tank” judge, stands by. In a video on his YouTube channel, O’Leary talked about how high interest rates, which ranged from 21% to 23% around the time the video was filmed, can wreak havoc on your finances if you’re not careful.
Still, O’Leary fully recognizes that you need a credit card to build good credit. The trick is learning how to use those cards responsibly instead of treating them like limitless piggy banks. It’s a lesson he’s keen for his son, and all Millennials, to pick up on.
In a follow-up video, he explained how younger generations can build smart credit habits.
You Can’t Game the System
Lest the youngsters think they can avoid what they might perceive as a hamster wheel of credit-building, O’Leary wants them to think again. While you might be able to get by renting rooms or buying used cars from friends or folks on Facebook Marketplace for a time, eventually, you’ll need to borrow money from a bank or other financial institution to buy a home or car.
“I tell every Millennial, even though I don’t endorse credit cards, it’s very hard to advance your credit rating without one,” he said. The trick is to use credit cards in ways that boost your credit while reinforcing positive financial habits.
“Everyone should understand that there’s no way to game that system,” he added. “You’ve got to establish a credit rating, or you can’t borrow.”
Start Small and Sensible
So, how should you go about responsibly building credit? O’Leary recommended that his son get a credit card with a modest $1,000 limit, spending only about $50 or so on it every month — and, crucially, paying it off in full every month.
“Now he’s got a pristine credit rating and he’s only ever put a few thousand bucks on the card,” O’Leary said.
Create a Smart Credit Card Strategy
O’Leary’s advice to his son aligns with his broader strategy for smart credit card use. While new users are wise to start with just one card, over time, they may feel comfortable adding a second — each with a distinct purpose.
He has one credit card with a tight $2,500 limit that he uses strictly for online purchases. The other, he uses solely for in-person transactions. Millennials and even Gen Zers, who live much of their lives online, should take note of O’Leary’s reasoning: By keeping one card offline, he protects it from cybercriminals and ensures that even if one card is compromised, he still has access to credit.
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