There is a belief among many that millennials are not heavy credit cards users. Younger individuals, aged 18-34 (as millennials are defined), tend to stray away from credit card use for fear of racking up debt in much the same ways many of their parents have. Or, at least, this is what is assumed.
But are the majority of millennials keeping away from credit card use? According to a Credit Karma study, it would appear as if they are not. On Mashable.com, Emme Hinchliffe reports that the study found that two-thirds of millennials have at least one open credit card. Conducted in May and June of last year, the study surveyed 1,000 millennials and found that they are more comfortable with using credit than most people assume.
Hinchliffe points out that Credit Karma’s study is backed up by a Gallup poll that had similar findings. In February 2016, Gallup found that 65 percent of millennials have credit cards. Such survey results suggest that there is a misconception about the ways in which members of our younger generation spend their money. As an example, Hinchliffe points to an article in The New York Times that reported low usage of credit cards by millennials.
“Millennial spending habits, particularly in how they used credit cards, has been under scrutiny,” she writes, “The piece addressed credit card debt, highlighting the statistic that the number of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989, according to a Times analysis of Federal Reserve data. But beyond credit card debt, the Times said millennials have been ‘spooked’ by credit cards in general, abandoning credit for debit cards and cash.\”
Hinchcliffe does admit, however, that although studies are finding that millennials do use credit cards, they are using them in lower numbers than their predecessors – Gen Xers (78 percent) and Baby Boomers (83 percent). On CreditCards.com, Sabrina Karl reports that there is also a difference in credit card usage between younger and older millennials.
What is the difference in credit card usage between younger and older millennials? Breaking the age group into two categories, younger (aged 18-24) and older (aged 25-34), Karl discusses the finding of an online FICO study that surveyed 1,000 American consumers in the 18-34 millennial age group. Conducted between October and November 2015, the study found that students (made up primarily of members of the younger group) use their credit cards less than graduates/parents/working individuals (members of the older group).
“In the new parsing, older millennials become the most likely group to use credit cards, at 83 percent, versus the runner-up boomers at 78 percent,” reveals Karl, “The 25-34-year-olds are also more likely than both older generations to hold three or more cards, at 50 percent. This is more than double the 24 percent of young millennials who indicated they had at least three cards.”
At Canadian POS Corporation, we’re big believers that current-day millennials will use credit cards in greater numbers as they age. Studies are confirming that while they may not pay with credit as much as their parents do, they see the benefits of the payment method. As a result, we believe that Canadian merchants should definitely offer credit card payment options to their customers.
For more information about how you can begin to accept credit cards with our top-of-the-line Countertop and Wireless POS terminals, please don’t hesitate to call Canadian POS Corporation at 1-877-748-2884 or email us at info@localhost.