NEW YORK CITY – Millennials are not using credit cards as much as older generations, while the younger generation of 18 to 24 year olds prefer to pay with cash, Fortune reports. “[Millennials] experienced the Great Recession just as they were beginning school or starting their career, pondering about buying a home,” said Erin Currier, Director of Financial Security and Mobility at Pew Charitable Trusts. “They’re very sensitive to this life experience.”
TransUnion found that millennials have fewer credit or debit cards with lower balances than GenXers did at age 21 to 34. Interestingly, more millennials have personal or auto loans instead of credit cards. TSYS Merchant Solutions found that millennials will likely shift to credit cards when they pass 25 years old.
“As millennials grow older and more affluent, the ownership of credit cards and the need for and desire for credit cards will increase,” said Solana Cozzo, vice president of Prepaid and Financial Inclusion at Mastercard.
While millennials won’t change spending habits overnight, they will probably be drawn to awards credit cards, like cash back and airline miles.