A Third of Millennials Have Never Had a Credit Card
Jim LiebeltJim Liebelt's Blog
- 2015 Apr 20
*The following is excerpted from an online article from USA Today.
In a society where tens of millions rely on a credit card to shop or pay bills, a new survey reveals that more than a third of Millennials have never had one.
According to CreditCards.com, 36% of Americans between the ages of 18 and 29 have never had a credit card.
That may be due in part to a 2009 law that whittled away the near-ubiquitous offers of credit to college students, says Matt Schulz, senior industry analyst at CreditCards.com.
Those reforms stated that those under age 21 had to prove their income or get parental permission in order to obtain a credit card. "That's very different from the past,'' Schulz says. "I know when I was in college, every dorm mailbox was overrun with credit cards, and you had banks and credit card issuers handing out pizzas and Frisbees to get people to sign up.''
The Great Recession also may have left some younger consumers reluctant to rack up charges.
"With Millennials, we have a generation that is plagued with student loan debt, dealing with a difficult, ever-changing job market, and has already witnessed an extremely negative stock market event, all at the beginning of their adult lives,'' says Michael Baker, a certified financial planner based in Charlotte, N.C. "Adding credit card debt to the mix isn't very appealing, and I believe that Millennials are trying a different path.''
Millennials also may simply be more cautious than their youth might suggest.
"Cash has always been king for Millennials, and they're often extremely reluctant to invest or otherwise leverage their precious savings," says Amy Hubble, a financial planner based in Oklahoma City. "We grew up in a world where we were always on the defensive when it came to strangers, cyber-scams, or 'too good to be true' sales pitches, so often the eight credit card offers you receive in the mail every day have begun to fall into that category of 'junk to be ignored.'"
Schulz says that more Millennials are leaning towards debit or pre-paid, rather than credit, cards.
But the CreditCards.com poll found that among those who do have a credit card, 47% got their first one before they turned 21, in many cases before the federal legislation went into effect.
And a significant number of Americans believe young people should have their own credit lines. The survey of 1,000 respondents found that 1/3 believe those between the ages of 18 and 20 should have a credit card in their wallets.