New study: millennials least likely to own a credit card

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HUNTSVILLE, Ala. (WHNT)-- A new study by Bankrate.com reveals more than 6 in 10 millennials don't have a credit card.

According to the report, released Monday, 63% of people ages 18-29 do not have a credit card. In comparison, only 35% of adults 30 and over admit they don't have one.

This could be a bad thing if they need to buy a house or car and need to qualify for certain loans with a good credit score, said John Burnett, University of Alabama- Huntsville finance professor.

"I think for a lot of young people, establishing credit with a credit card is perhaps the easiest way they can get started [building that credit]," he said.

College students we talked to say instead, they tend to rely on debit cards for electronic transactions. They say it's an option that allows them to use their money, but there's no way they can spend what they don't have.

They tell us they haven't opened a credit card out of fear they won't be responsible enough with it.

"Especially when it comes to shopping, I feel like a credit card would just get me in huge trouble," said Lena Cheatham, a University of Alabama- Huntsville freshman.

"If I had a credit card, then I might forget about paying the bills on time and I might mess up my credit score," echoed UAH sophomore Ryan Gott.

There are other ways to build credit, if you or your child is apprehensive about signing up for a credit card. Burnett says it can help to take out a small loan and pay it back over time, or even open up a department store card and use it sparingly.

But if you decide it's a good idea to open a card, bankers we spoke with by phone recommend starting small, and starting early.

It may require a co-signer if you're just starting out, but they say it's good to open up a card with a small line of credit (like a few hundred dollars.) You can work your way up to a higher limit if need be, and build credit in the process while you're young. That way, upon graduation, you have some more flexibility.

But the overall message: be responsible, no matter what you decide to do.

"The biggest way to ruin your credit is to not pay your bills on time," said Burnett.

3 comments

  • Ray

    Well, considereing how much debt that alot of the millennials have it might not be such a bad thing. Credit cards yes are good for building credit but so many people overspend on them and going back to a spend only what you have (system) with debt cards might be a good thing. It would force them to save their money for large purchases. Getting out and buying that home might not be a good idea these days right away instead of renting until you can really afford a home. I bet if they asked their parents about credit cards they might advice them to stay away too…

  • Country Boy 2

    I agree. The way people think these days and the way we interact has drastically changed, however, the system has not so much. I have told my child to stay away from credit cards for as long as possible. Instead I build their credit by adding them to my credit card as an authorized user. Now when we get the yearly free credit report it shows them as having a credit card with outstanding history. She doesn’t get to use the card, but reaps the benefits of my good credit. After college, moving out, getting a job, etc., she can decide if she wants to go for it. Meanwhile us, the parents, are slowly but surely eliminating the use of a credit card and we are over 50. In fact, I honestly wish we never got involved in credit cards. I believe the system of credit scores, etc. needs to be changed to reflect the current, more intelligent, and safer thinking of the 18-29 year old “millennials”. Besides that, the interest rates even offered to scores over 800, are ridiculous…especially when variable. AND….Stay away from a stinkin’ credit union!!! They don’t squat for interest or dividends, charge higher interest rates, boast a lot and build more and more branches!!

  • Skillpot

    Hmmm? ““If I had a credit card, then I might forget about paying the bills on time and I might mess up my credit score,” echoed UAH sophomore Ryan Gott.” Seems to me that you do not have a ‘score’ unless you have credit?

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