The Ultimate Guide to Credit Cards
Monday, May 20, 2024

Study: 2 in 3 Millennials Hate Credit Cards

Study 2 3 Millennials Hate Credit Cards
Alexandra Leslie

Written by: Alexandra Leslie

Alexandra Leslie
Alexandra Leslie

Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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Credit cards may be one of the best ways to build credit, but a new survey commissioned by Bankrate found the majority of one generation wants nothing to do with them. And it’s not the generation you might expect.

A massive 63 percent of millennials — yes, those aged 18 to 29 who are typically known for bad credit card habits — currently do not have a credit card, according to the survey.

A meager 23 percent of millennials have one credit card. Only 6 percent of millennials have two cards, whereas 13 percent of those aged 30 to 49 have two credit cards (the numbers increase with age; 21 percent of those 65 and up have two cards.)

A Different View of Credit Cards

Why is this youthful generation not so hot on credit cards? Millennials were either just out of college or still in school when the Great Recession hit, giving their generation some healthy skepticism about debt.

They aren’t alone — studies show ever since the Recession, Americans as a whole rely less on credit cards.

Number of Credit Cards Millennials Own

Additionally, the Credit CARD Act of 2009 made it difficult for those under 21 to get a credit card without a co-signer or significant income, so it became more difficult for many millennials to get a card even if they wanted one.

Already Dealing with Other Debt

Percent of Consumers Who Carry 2 Credit CardsBankrate concludes another reason why millennials don’t like credit cards is because many of them are already saddled with debt in the form of student loans.

According to the Project for Student Debt, the average amount of student loan debt for college grads from 2012 is nearly $30,000, and student loan debt grew 6 percent each year from 2008 to 2012.

With so many students exiting college already in debt, the thought of racking up credit card debt on top of it is unappealing.

The Downside of Saying No to Credit Cards

While millennials who avoid credit cards may be doing themselves a favor in the short term by avoiding debt, there is a long-term risk.

Establishing good credit helps you get favorable rates on all kinds of insurance and loans, qualify for renting an apartment and pass a credit check for employment.

If you don’t have a credit card, your credit history will be limited. Those who have loans with good repayment history have a leg up, but millennials with no debt or repayment history will likely struggle to get approved for car loans or mortgages without a cosigner.

One Millennial’s Story

Like many millennials, Mary Neal, a 29-year-old from Garland, Texas, got into serious trouble with credit cards as a college student.

Mary Neal

Mary Neal, 29, struggled with credit card debt at an early age.

“I got one with the mentality that I need to start working on my credit now, to help with my future. What a load,” she said. “I got in over my head and couldn’t keep up with the payments or the escalating balance. I was young and stupid and just let it go to the point where I was getting negative marks on my credit.”

Neal canceled her cards, made payment plans, and vowed to avoid plastic again until she was financially stable enough to handle it.

Years later, after graduating from law school and getting a good job offer, Neal opened a Banana Republic card to help her buy work clothes. In two years, they’ve raised her credit limit by more than $3,000 and converted the store card to a Visa card without asking her.

“I’m in this Catch-22 where I’m improving my credit, but this improvement is causing the credit card companies to hound me about opening new cards and up my limits when I don’t request it,” she said.

Neal and her husband keep one credit card handy for emergency purposes, but for the most part, they avoid them.

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