According to a survey published by Bankrate.com, only one out of three millenials carries a plastic. More than half of those that do carry a plastic use a debit card rather than a credit card. This could mean two things: either millenials are always in debt that they prefer not to use a credit card to add more debt, or they are too afraid of accruing a debt that they always prefer to use cash or a debit card.
Apparently, it’s the latter. Millenials are reportedly more afraid of credit debt than they are of death. In the midst of the 2008 global financial crisis, millenials were at the age where they just started going to college or have just graduated and starting their careers.
Department of Education data suggested that student debt for a typical college degree rose to 164%, which makes the financial burden for students great. And right on the verge of starting their careers and wanting to buy a home, reports of foreclosures and home repossessions abounded. This makes the current millenial behavior towards debt understandable.
Some millenials are also growing cautious about credit card debt as they witnessed family and friends pile up thousands in debt. With higher credit limits than the amount earned in a month, having a credit card will certainly be an afterthought.
However, as millenials grow up, that trend in behavior may soon change as credit scores become basic requirements for auto loans and housing loans. As spending habits begin to change and with other credit card benefits in mind, their aversion to credit cards also begin to wither. As one interviewee put it: “I consider it a necessary evil.”