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Millennials aren't utilizing CC

Frequent Contributor

Re: Millennials aren't utilizing CC

and as far as millenials threatening the industry, its more of them defaulting on CC debt then not using CCs

 

Of course many (most?) of us on these boards have run into problems/trouble with our misuse of credit. We then take a forced break from credit and then begin again.


Message 11 of 34
Valued Contributor

Re: Millennials aren't utilizing CC


@DTFGhostwrote:

As a millenial (1994) I have to say i was raised on old school ideals, if you cant pay it with cash dont buy it at all. I had an aversion to credit cards and never intended to get them. Then when i was 20 i learned just how important credit really is when my truck broke down and couldnt afford to fix it or had the credit to replace it.  I have been on a long hard journey ever since then to build my credit to the best possible number i can get so that never happens again. Now that i have learned so much about credit i will never go back, as ultimatley if you play your cards right you can save alot of money.

 

As far as the people around me, its a mixed bag. one of my coworkers dosent use credit cards at all but uses cash with occasional debit, one uses thier AU card from her parents, and one is a mixed bag of CC and debit.

 

and as far as millenials threatening the industry, its more of them defaulting on CC debt then not using CCs


Very valid point!! I often hear people say "credit cards are bad", but again, it's how one manages them.  At the same time, it is very easy to fall in CC debt if a couple of emergencies come up and don't have the money in the following weeks/months to pay it off. It's a tricky cycle.  




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Message 12 of 34
Established Contributor

Re: Millennials aren't utilizing CC


@c00mtgwrote:

@DTFGhostwrote:

As a millenial (1994) I have to say i was raised on old school ideals, if you cant pay it with cash dont buy it at all. I had an aversion to credit cards and never intended to get them. Then when i was 20 i learned just how important credit really is when my truck broke down and couldnt afford to fix it or had the credit to replace it.  I have been on a long hard journey ever since then to build my credit to the best possible number i can get so that never happens again. Now that i have learned so much about credit i will never go back, as ultimatley if you play your cards right you can save alot of money.

 

As far as the people around me, its a mixed bag. one of my coworkers dosent use credit cards at all but uses cash with occasional debit, one uses thier AU card from her parents, and one is a mixed bag of CC and debit.

 

and as far as millenials threatening the industry, its more of them defaulting on CC debt then not using CCs


Very valid point!! I often hear people say "credit cards are bad", but again, it's how one manages them.  At the same time, it is very easy to fall in CC debt if a couple of emergencies come up and don't have the money in the following weeks/months to pay it off. It's a tricky cycle.  


Credit cards aren't bad, bad spending habits are what's actually bad.

 

As to the bold part, I think that can be largely mitigated by having at least one high limit CC with a 0% APR offer on tap.



As of 6/21/18:

Message 13 of 34
Regular Contributor

Re: Millennials aren't utilizing CC

I don’t think there is any threat to the cc industry. Americans are hyper consumers with one of the lowest savings rates on earth. CC aren’t bad, people misuse them. Look at the credit repair forum. How many posts are there ? 500k plus ?  

 

My my kids are millennial and I don’t see them or their friends cutting back. I think the big problem down the road is the $1 trillion plus in student loan debt. Default rates on those are rising 

Message 14 of 34
Frequent Contributor

Re: Millennials aren't utilizing CC

How are they defining millennial? Because it's an ill-defined generation, anywhere from 18-37 years old depending on the group setting the definition. I'm in my early 30s and count myself as "barely millennial." My first credit card was at 18, it was approved along with my scholarship to college, $500SL from BOA and grew very slowly. Other cards came later. I managed my credit very well over the years, single and married - it wasn't until I fell into a bottomless pit in terms of chronic illness post-divorce (late 20s) that my ability to keep up with finances (along with all other household matters) was affected and I ended up in bankruptcy. Now rebuilding.

 

I don't talk about this experience in my peer group. Only here. But most of my peers (age-wise) are extremely skeptical of credit. My ex-H is the only one I remember who was keen on credit and also used it wisely - not exactly to this board's specs but stays out of trouble. My ex-bf never had credit until shortly before I broke up with him, and he was very cautious with it. But many (not all) of my friends in my age group are the types who shun credit cards, use only debit or cash.

 

Something to keep in mind is that while our generation is very soaked in student debt, we (at least in my public school and college, in CA) were also very heavily educated against credit cards in secondary and post-secondary school. We were told that there would be marketers on your first days at college or when you first got out of HS, and that it was very easy to run up a balance that you would never be able to pay back. 

My generation was hit very badly - particularly those in my sub-age group, who were graduating high school or college straight into the financial crisis and recession - with, some of them, very high student debt; most of them, very poor job prospects in the beginning, which lowers salary prospects your entire lifetime; therefore limited ability to build savings over time, including limited ability to contribute to retirement savings on your own (and we all know that most employers that millennials are able to get a foot in the door with are not offering real retirement plans) or when it is really going to offer growth; and therefore reliance on suboptimal sources of income/support such as credit cards, public assistance, family networks etc. (I believe there is no shame in either of the latter, but I think we'd all prefer folks being as independent as they prefer to be).

I think those of us in the older half of the millennial group are just beginning to climb out of the recesses we'd found ourselves in, and those in the younger half perhaps are in a little better spot, but are still in a very changed labor market with lower wages and fewer benefits - although I've also seen reports about the rise in union membership/organizing being mainly in the millennial age group. 

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Message 15 of 34
Established Contributor

Re: Millennials aren't utilizing CC


@capabkwrote:

Something to keep in mind is that while our generation is very soaked in student debt, we (at least in my public school and college, in CA) were also very heavily educated against credit cards in secondary and post-secondary school. We were told that there would be marketers on your first days at college or when you first got out of HS, and that it was very easy to run up a balance that you would never be able to pay back.


While I appreciate where they're coming from, I feel ultimately this advice does more harm than good. Sure we definitely need to be aware of the many predatory lenders out there, but IMO credit itself isn't the problem, it's people's financial habits and (lack of) financial knowledge. I agree credit cards enable the financially irresponsible to greatly accelerate their demise, but you still can't blame credit cards for that. I think proper education rather than scapegoating credit is the real answer here.

 

I personally find it absolutely apalling there's no mandatory "basic finance 101" either in HS or college, or even as a component of civics class. Everything I know about finance, I owe it to my parents and the internet. In some ways I'm actually glad I grew up somewhat poor, as it really helped drive home the importance of savings and not living beyond your means. I'm also really thankful my parents kept to the same lifestyle despite their finances being in much better shape during my teenage years. They set a good example for me to follow, and I benefit from it to this day.



As of 6/21/18:

Message 16 of 34
Regular Contributor

Re: Millennials aren't utilizing CC


@Benmarkley3wrote:

@corpcrmgrwrote:

Millennials are ditching credit cards, and it's threatening the entire industry

Millennials appear to have an aversion to borrowing, with just one in three carrying credit cards, compared to the majority of older people.

Millennials have been accused of disrupting many industries, from newspapers to brick-and-mortar stores. Credit cards appear to be next in line.

Just one out of three millennials carries plastic, according to a Bankrate.com survey, compared to the majority of older Americans. In addition, a Fed survey found the 18 to 24 demographic preferred to pay cash more than others. And if they do carry a card, it tends to be of the prepaid or debit variety, TD Bank found.

 

http://business.financialpost.com/personal-finance/debt/millennials-are-ditching-credit-cards-and-it...

 

Interesting read. OK, millennials: True??


Think there’s not enough credit education going on in schools these days. Many don’t understand free rewards and grace periods to never pay interest. They have no problem swiping a debit card. So I think it’s more ignorance. They are also less likey to buy a house and more prefer traveling experiences with their money,


These people you are describing, assuming they ever even listen to the radio, are most likely fans of Dave Ramsey and have never heard of Clark Howard.  Just a thought. <shrug>

Message 17 of 34
Super Contributor

Re: Millennials aren't utilizing CC

Millennials seem to be the focus these days. One thing I have noticed is that often I read one thing about the age group and then a few days later something almost 180 degrees to the opposite pops up? Of late, Millennials are asking the question how do you define our age group as there are Gen Zer's included by age ... great question. In looking back through the generations every bracket has something to focus on. Why only the Millennials? Where did Gen X and Y'ers go (drop off the face of the earth?). Inquiring minds want to know?! Smiley Wink
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Message 18 of 34
Frequent Contributor

Re: Millennials aren't utilizing CC

There is never an agreement for any of the age brackets. Baby Boomers were from 1946 until 1964. How did someone born in 1964 remember Kennedy assassination in 1963? How did late Generation X born people even remember Reagan? Do late Generation Y remember Bill Clinton being president? And most of the Z Generation were born after 9/11. Demographers try to place people into groups that many don't really belong.

 


Message 19 of 34
New Contributor

Re: Millennials aren't utilizing CC

I'm 31. I consider myself to be very into credit and try to maximize rewards. I got my first credit card when I was 24 because I wanted to take an overseas trip with my friend and I didn't want my dad to see the charge on my debit card. (We had a joint checking account since I was 16. And he's nosy 😂).

I was approved but my friend wasn't so we never did go on the trip. I didn't use the credit card one time for 4 years. I somehow stumbled upon this forum because I was searching for reviews on the best rewards card to get and my eyes were opened.

I honestly think the reason "millennials" (or anyone) is afraid of using credit is the lack of education, like some previous posters mentioned. I didn't know anything about credit or how it could benefit me until I accidentally found this forum. I agree there should be a class...FICO 101



Message 20 of 34