Millennials and credit cards: a complicated relationship.

Emily Marchak 09/26/16 - 2:12 pm

Millennials and credit cards: a complicated relationship.

Yes. No. Maybe. Well, it’s complicated. What’s the deal with Millennials and credit cards? Here are four things financial marketers should know:

  1. Only a third of Millennials have credit cards.
    Unlike their older generational relatives, roughly 33 percent of 18- to 29-year-old consumers actually own credit cards, according to Bankrate Money Pulse survey.
  2. Credit card debt has fallen since 1989.
    According to the recent data from the Federal Reserve, the percentage of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989. While this data doesn’t include information on the number of credit cards a person has, it does cast an interesting light on the spending patterns of this audience. For example, this audience is either paying off credit card debt each month, or they aren’t using their cards as much as the generations before them.
  3. Millennials use debit for small everyday purchases.
    Economists studying Millennials’ payment patterns have noticed this audience skirting both cash and credit for small purchases. How? Millennials are resorting to their debit cards for small purchases, due to the fact that it draws funds from their bank accounts. Other payment options include mobile apps like Venmo and PayPal, for the same reasons. The Federal Reserve noted that credit cards are being used for bigger purchases (computers, appliances, etc.).
  4. Millennials are spending with a recessionary mindset.
    Yes, we are out of the recession, but research shows Americans are still spending like they are in a recession. Here is what some Millennials are saying:
  • “I don’t want to use a credit card irresponsibly, and because of that, it’s scarier to use,” she said. “I grew up — I saw 2008 — I saw my dad get laid off. I don’t trust the financial market.” – Rebecca, New York Times
  • “My financial situation is the same as during the recession so I am cost conscious about everything.” –  Natalie, CEB Iconoculture

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