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Millennials and credit card use

Established Contributor

Millennials and credit card use

I've recently started paying attention to the card habits of friends in my age group (I'm in my early 30s). What I've noticed so far is that credit cards are seemingly heavily disfavored; even if someone has at least one credit card, debit cards seem to be used for most/almost all purchases. Basically I want to have a discussion to see whether:


  1. This is anywhere near representative of millennials at large, and
  2. How/if issuers should respond (and if whatever they're already doing is working).

Personally I can see a future where credit card use is very uncommon. A lot of millennials lived through the financial crisis and saw parents and other family members struggle with debt, not to mention some having large student loan debt. Those early experiences likely resulted in certain habits being ingrained early on (like debit card use over credit card use), which are difficult to change later on. Some ideas for consideration:


  1. Adopt true chip and PIN for credit in the style of Diners Club, UNFCU, etc. I've lost count of the number of comments I've read/heard regarding how chip and signature is "useless", which makes me think there is a risk of people beginning to consider debit cards as "more secure" than credit cards (due to being heavily encouraged/required to enter a PIN at some/most stores)--potentially making adoption of credit cards more difficult.
  2. Charge cards. AmEx has a pretty big opportunity here, IMO, as the only issuer of charge cards (that I know of, anyway)--it's just that people are reluctant to pay AFs. A charge card without an AF may do pretty well since it's impossible to go into debt with those. Alternatively, something like Europe's "delayed debit" cards might work too, though I'm not sure how viable those would be.


Message 1 of 149

Re: Millennials and credit card use

I am 30 and had a bankruptcy in 2013 due to getting completely overwhelmed by helping my mom by putting a lot of debt on my cards. I also did eat out a lot, which didn't help at all. I got my first card since chapter 7 last year (Amazon store card), and since then, my husband and I have gotten 13 more cards all together (we're finally gardening). For him (also 30), credit cards make him nervous. They don't cause him to spend more, but he doesn't like to manage them. I have learned a lot from my bankruptcy and only put stuff on them that we can pay right then and there. I use them for rewards and cash back. We have gotten over $1,000 from rewards, referrals, and signup bonuses in the past year.


I think millenials would warm up to credit cards if they knew the perks they can provide if used as a debit. Debits can still be charged as credit, so I don't feel they are necessarily more secure. When I changed my mind set and only charged what I could afford and PIF right away, everything changed and credit cards are a way we can save more money. It is interesting to think what CCC could do to encourage more millenials to use credit over debit. For me, just the cash back and rewards are enough for me.

Message 2 of 149
Established Member

Re: Millennials and credit card use

I do remember reading an article somewhere that said that millennials are shunning credit cards a lot more than older generations. I'm in my mid 20's and haven't used a debit card at all since having credit cards. Credit cards require a bit more self control than debit cards but the rewards and fraud & purchase protections make them a no-brainer to me.


ETA: It was an article on

Message 3 of 149
New Contributor

Re: Millennials and credit card use

Have you noticed any correlation between friends who use debt cards and have no/little liquid cash savings?  Exclude 401K, IRAs, and other investments.


The ones I know who use debit cards more often do not have an emergency fund.  Perhaps without a backup source of cash to pay off a credit card completely just in case, they rather live within their means of paycheck to paycheck.


Or it could be they have racked up credit cards that are SD'ed until they pay them down and are left without only a debit card to put daily spend on.  Lots of 0% BT offers floating around where someone is paying the bank interest after the introductory period.

Message 4 of 149
Senior Contributor

Re: Millennials and credit card use

Interesting thread OP. I'm looking forward to reading everyone's post.

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Message 5 of 149

Re: Millennials and credit card use

I'm in my late 20's and I'd say between my friends, it's equally balanced. You have your financially savvy people who make use of all the perks of having a credit card. You have far more fraud protection using a CC as opposed to a debit card. You get cash back, etc etc. I also have friends who just... don't get it. They primarily majored in some form of arts program and anything finance just makes their heads explode. 


I don't think its really a generational thing. I think it's more of a financial literacy thing. Maybe our generation just has more liberal arts majors than previous generations. Maybe no one taught them how to budget a check book. I don't know exactly. I will say though that overall, almost no one has a sizeable savings. Everyone is too busy paying off student loans or they just majored in something that doesn't pay out monetarily. I'd say only a quarter of my friends have their financial act together with a 401K, IRA, and have decent savings. 

Message 6 of 149
Regular Contributor

Re: Millennials and credit card use

31 year old here and I never use my debit card. I use my credit cards for everything then pay them off at the end of the month. The rewards are I my favor. Last month my rewards totaled around $90. I look at that as extra money in my pocket
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Message 7 of 149
Established Contributor

Re: Millennials and credit card use

I'm in my mid twenties and I prefer to use a credit card for most of my purchases. The thought of using debit at a gas station or for dining makes me cringe for a number of reasons. With fraud so rampant, I'd rather deal with it on a credit card than with my own bank account/debit. Additionally, I'd be giving up 5% at the pump if I chose not to use my PenFed Platinum Cash card, or 6% on groceries if I didn't use a BCP. That is quite an opportunity cost just to use debit... Quite frankly, I don't mind at all if other millenials choose not to use credit. That just means the banks will continue competing aggressively for our business, and I will just continue to enjoy the rewards and bonuses offered. 


As for the OP's second consideration, there are other banks with charge cards; however, they have AFs as well from what I can see. The challenge would be combining a competitive reward structure with $0 AF, as there wouldn't be a steady flow of interest for the bank to defray some of the rewards disbursements. Such a charge card may work well for customers but would probably perform quite poorly for the bank. The American Express Zync card (which I still have to this day) was AmEx's attempt to compete in this segment and it fell flat. The AF started as low as $25 and increased as the user added more rewards to the card in the form of "packs." I doubt you will see AmEx introducing a no-AF charge card anytime soon.

Message 8 of 149
Regular Contributor

Re: Millennials and credit card use

Fast approaching 30 here myself.. I think there are two groups in my generation.. There are the ones supporting themselves (which is a lower percentage than any previous generation by this age), and the ones that aren't. Of the ones that are supporting themselves.. there are few of them to begin with and things are pretty tight for us. Many are afraid of credit cards because of seeing others fail with them or just being told that cards are bad. Others don't understand credit and stop trying after a couple denials for cards they werent eligibile for. Others still have already rang up debt they are still paying for and are reluctant. Some of us though are financially conservative AND use credit card rewards as another tool to save money. As for the ones still getting help from their parents (which I believe to be A LOT), they simply don't understand the value of money and don't care. It's sad, but most people my age really don't seem to have a clue about finances.

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Message 9 of 149
Established Contributor

Re: Millennials and credit card use

I am also 30 and my fiancé is 31. I would have to say for my group of friends (and my fiancés as well) it's the opposite, all, including myself, use our credit cards rather than our debit and PIF when it hits. I don't even carry my debit card with me at this point. I had some fraud issues at one point, and while PNC did fix it, it took longer than I would have liked. I am also rebuilding my credit from some hits that happened to me when I was with my ex husband, so using my credit cards is beneficial to me.

As a side note I love reading the responses on this post!
Message 10 of 149