Why Millennials are Terrified of Credit Cards

by Mercator Advisory Group 0

A recent article published in Time magazine discusses the results of a Bankrate.com survey that revealed that 18-29 year-olds prefer using debit to credit by 3:1 and more than 3 in 5 of these aged millenials do not have a credit card. It noted that millenials tend not to trust banks and fear that credit card use will cause them to incur unwanted debt at a time when many millenials are still in debt trying to pay off their school loans especially when unemployment for this age group is higher than it was for previous generations. Nevertheless, millenials need to build up credit to help them buy cars or homes of their own.

“Millennials may have no qualms about skipping cash and swiping plastic for purchases, but we are picky about what kind of card we use. A study released a few weeks ago found that 18 to 29 year olds prefer to swipe debit to credit by a ratio of 3:1,” the article states.

Millenials are indeed picky about the payments cards they use, according to Mercator Advisory Group’s CustomerMonitor Survey Series which is based on a survey of 3,000 U.S. adults fielded in June 2014.

Our data reveals that, contrary to previous historical data, since the enactment of the Durbin Amendment, young adults ages 18 to 34 are no more likely than average to use a debit card and less likely than average to own credit cards. Young adults (56%) and especially 18-24 year-olds (50%) continue to be less likely than average (61%) to own a credit card. In an upcoming report on debit card use, Mercator Advisory Group finds that young adults are less likely than average to participate in credit card rewards but are far more likely than average to be motivated to use their debit card more often. This is due to debit card reward programs. In fact, more than half of young adults are motivated to use their debit cards more often because of debit card rewards, cash back or offers received when using it.

For more information on the Mercator Advisory GroupCustomerMonitor Survey Series reports, please visit the PrimaryData Service overview.

Overviewby

KarenAugustine

, Manager, Primary Data Services

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