Millenials and Credit Cards

creditconcept · ‎03-02-2015

From the news this morning:
"Unlike their parents, 60% of Millenials don't have a Credit Card or Savings Account"

My question: what's causing such a widespread financial illiteracy amount people 18 - 29?

Anonymous · ‎03-02-2015

@creditconcept wrote:
From the news this morning:
"Unlike their parents, 60% of Millenials don't have a Credit Card or Savings Account"

My question: what's causing such a widespread financial illiteracy amount people 18 - 29?

You're opening a large, political can of worms. In no particular order:

The baby boomers mismanaged their own finances, so now they can't retire. This has led to a dearth of jobs for the younger generation

Millenials have had to take on excruciating amounts of debt that have been unheard of in prior generations. They are loath to take on more

Millenials have learned from the mistakes of their parents, and attempt to spend within their means, rather than keeping up with the Joneses

The parents of millenials have spent the last 30 years spoiling their children and being their friends, rather than being parents.

Social Security and Medicare are going to go bankrupt in the next twenty years. Why would they think that taking on debt is a good idea?

Savings accounts are outdated concepts that are useless in the current interest rate environment. A checking account gets the same rate and has more utility. On the flip side, over 70% of millenials have started putting money into 401ks and IRAs.

Anonymous · ‎03-02-2015

Might be because 60% of their parents should never have had CC. Many who went into the recession with high amounts of debt got crushed by the bad economy. Their kids didn't want to make the same mistake.

As far as savings, same problem I had at that age you can't save if you have nothing to begin with.

Anonymous · ‎03-02-2015

As I am 21 but do not fall in that 60% I know friends that do. Many of my friends say they are afraid of credit cards because they don’t want to end up in debt. Which can be true but if you manage them right and spend within your means you will not have debt. Also with the saving account many say they don’t have enough to save. Maybe just bad management with their money and would rather spend it elsewhere. Me on the other hand I do have credit cards, saving and a 401k. Full time college student plus work full time

Anonymous · ‎03-02-2015

Oh now this is fun.

The statement is very misleading. I'm going to be starting a PhD soon and this is actually what I will be researching. Millenials and Credit Card Debt.

Millennials are the second biggest consumer of luxury goods right now, behind the baby boomers and the consumption of these goods has increased 33% year on year. The simple truth is that Millenials are buying things that they can't afford and they are supplementing this consumption via student loans, parents money, and of course credit cards.

That statement is combining Credit Cards and SavingsAccount making the number much larger than it is. The also comes from the question of how are they categorizing these accounts. Are they including AU? Are they including delequient accounts?

That blanket statement just rubs me wrong as it goes completely contrary to the research I am doing on consumer behavior.

Just my two cents.

Anonymous · ‎03-02-2015

According to my research 100% of statistics can be misleading. 😉

youdontkillmoney · ‎03-02-2015

@creditconcept wrote:
From the news this morning:
"Unlike their parents, 60% of Millenials don't have a Credit Card or Savings Account"

My question: what's causing such a widespread financial illiteracy amount people 18 - 29?

^^^^

One major driver is they do not have a job in the first place.

Iamien · ‎03-02-2015

MIllennial who exploits creditcards here.

I would guess it has to do with the new regulations that prevent students without declared income from being issued creditcards.

My freshman year(08 or so) there were CC companies at orientation/campus visit days. Now, there are none.

Our parents mis-used credit(as a rule) and creditors are less able to approach us. This means the only people who end up with creditcards are those who seek them.

Out of my employed friends, I'd say a fourth of them use creditcards. Also, I think lenders today are far less forgiving of mistakes those new to credit can make than they were in the past.

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Anonymous · ‎03-02-2015

I read millennials don't wanna buy houses either, they prefer apartments with perks. Like others mentioned, I think they learned a lot from when economy was crappy and saw what their parents when through.

Anonymous · ‎03-02-2015

@Iamien wrote:
MIllennial who exploits creditcards here.

I would guess it has to do with the new regulations that prevent students without declared income from being issued creditcards.

My freshman year(08 or so) there were CC companies at orientation/campus visit days. Now, there are none.

Our parents mis-used credit(as a rule) and creditors are less able to approach us. This means the only people who end up with creditcards are those who seek them.

Out of my employed friends, I'd say a fourth of them use creditcards. Also, I think lenders today are far less forgiving of mistakes those new to credit can make than they were in the past.

Millenial here as well. I was a freshmen in '03-'04 (class of '07), I remember the CCC tables at orientation day and how they'd get people to sign up for credit cards. I also recall getting cold calls from telemarketers pitching credit cards at 8AM while in the dorms. They were not hard to come by at all, anyone who wanted a CC could basically get one and a number of people got in financial trouble with them.

I got my first credit card from BofA in '03 with a $1000 CL and no credit history or income to speak of (I still have that card). It was definetly different lending environment back then.