Millennials Shying Away from Credit Cards
Credit card issuers must be very concerned by the results of a survey released today: nearly two-thirds of millennials do not have a credit card.
63% of adults 18-29 years old do not own a credit card compared to 35% of adults ages 30 and older.
There could be several factors playing into this trend. The provisions of the CARD Act made it more difficult for people under 21 to be approved for a credit card; as a result, many issuers do not market their cards as aggressively to these young adults. Many millennials grew up during the economic downturn of 2008 when their parents struggled to hold on to their jobs and pay their bills. Finally, many young adults are already saddled with student loans.
And those that do have credit cards are not managing them very well.
Only 40% of millennials are paying off their credit card balances in full each month compared to 53% of the adults 30 and over. In addition, millennials are three times more likely to miss a credit card payment than the average credit cardholder.
The survey polled 1,161 consumers in late July and early August. It was conducted by Princeton Survey Research Associates International.
A Gallup Poll conducted in April found both credit card usage and debt falling. The average American only holds 2.6 credit cards now, compared to 2.9 in 2008. Among those that do have credit cards, the average number of cards owned is 3.7, the lowest number Gallup has seen since it began periodically measuring these financial habits in 2001. The number of people who said they do not own credit cards at all has also declined, from 29% in 2008 to 22% in 2014. The poll found 33% of credit card holders carry a balance from one month to the next, a record low since 2001.