Smart Borrower Blog

Millennials Treat Credit Cards Differently Than Their Parents

Jul 26th, 2017 @ 9:47 PM by Amber Nelson

The millennial generation – those between the ages of 18 and 29 – have watched their parents financial habits, and are doing things differently in many cases, especially when it comes to credit cards.

First of all, a majority (67%) of Millennials do not even have a credit card account. Perhaps that has something to do with the fact that 41% feel that credit cards are “scary,” according to a recent survey from LendEdu. By comparison, only 45% of Americans aged 30 to 49 did not have a credit card, 38% of those aged 50 to 64 and 32% over the age of 65. Clearly something different is going on with Millennials.

One reason fewer Millennials have credit cards is that it became much harder for young consumers and those with poor credit histories to get an account after the financial crisis and the reactive 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act. Many potential borrowers simply do not qualify under today’s standards.

Other Millennials are shying away from credit cards as they already have a mountain of debt in the form of student loans and are uninterested in taking on more. Yet others have found it difficult to obtain employment in the post-recession economy and cannot qualify for cards based on their income.

Another group of younger consumers seems to be staying away from credit cards because they have seen their parents get into trouble with debt and they do not want to follow in those footsteps. While those aspirations are sensible, those Millennials could be missing out on some great savings and rewards by not using credit cards.

A new survey from found that Millennials spend way more on things food, transportation, cell phone service and eating out than their parents and other age groups. In fact, they spend an average of $2,300 more annually on those budget items than all the older generations do. By using credit cards to pay for those purchases and paying off the bills in full each month, Millennials could be earning cash back or other financial rewards.

While those missed opportunities are sad, what is even sadder, is that those Millennials who do have credit cards do not appear to know how to use them wisely. The LendEdu survey found that 45% of younger consumers with credit accounts did not know what interest rate they were charged, and 48% do not pay off their balance in full each month, racking up those unknown interest fees. And 6% even believe that having a late payment will improve their credit score. Another 30% of Millennials with cards use them to pay for essentials like monthly rent and bills, a potentially dangerous method.

More education about credit cards in high school and college could help America’s youngest borrowers stop fearing credit cards and use them wisely to their advantage.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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