Why Are Millennials Rejecting Credit Cards?

ALEXANDRIA, Va. – Analytics firm Euclid reported that millennials represent $200 billion in spending power and may soon overtake Baby Boomers as the largest generation of consumers. But only 33% of adults aged 18 to 29 own a credit card, according to Bankrate.com.

Retail Dive reports that this may partially be due to the “economic fallout they grew up in, specifically the impact of the 2008 recession.” Not to mention, many have large student debts looming in the background.

"There's no question that many, many millennials have sworn off credit cards, and you can't blame them. Their scars from The Great Recession are still raw, their student loan debt is stifling and the last thing they want is even the chance of more debt," Matt Schulz, chief industry analyst at CompareCards, said in an email to Retail Dive. 

Another source in Retail Dive cited that the young generation saw their parents suffer from credit card debt at an impressionable age. Another way to put that? They’re afraid of debt.

So, retailers and companies are looking for alternative methods of payment that also meet millennials’ convenience and digital needs. This goes straight to the core of companies like Venmo and ApplePay. Studies also show that the generation loves loyalty points and rewards—and a good program could even prompt them to open up a store credit card.

The retail tech revolution is still growing and will continue to evolve. For now, mobile-first solutions and creative alternatives to traditional plastic credit cards are trending—and millennials are on board with the convenient, smooth transactions that still give them control.

Payment