Are Millennials Really not Using Credit Cards?

One of my favourite topics to write about is credit cards. I love credit card rewards which is why I charge most of my purchases (except at small merchants). I don’t think many people enjoy credit cards as much as I do but I do find it surprising when I read that millennials are using credit cards less.

Bankrate (a U.S. site) just released their Money Pulse Survey and found that just 33% of adults between the ages of 18 and 29 have a credit card. This is absolutely astounding if you think about it. Credit cards are such a vital part of our lives yet it appears millennials are no longer interested in using them.

This completely contradicts RateHub’s 2015 Digital Money Trends Report which found just 1.9% of Canadians aged 18-29 don’t have a credit card. A quarter (26.85 per cent) say they have more than 3 cards so why the big difference?

millennial credit cards

Circumstances have changed

I think it’s fair to say that recession of 2008 left quite an impression on Americans. It’s fair to say that American millennials witnessed first-hand what having too much debt can do to you. Even if they weren’t personally affected, the odds are they knew someone who suffered some serious losses.

When you see people around you losing their homes because of debt, it’s no surprise that millennials in the U.S. no longer have much interest in owning a credit card.

The opposite could be said about Canada. Although there was a dip in real estate prices, government intervention has arguably created a perfect storm. Borrowing money has never been cheaper so Canadians have been piling on debt.

The thing is, credit card interest rates aren’t tied to the overnight rates that the Bank of Canada sets. When you have credit card debt, you’re paying close to 20% to service it.

Why you still need to use credit

By now, everyone should know that you’ll need at least one credit card to build your credit history. Without a solid credit history, it’ll be extremely difficult to get a loan in the future e.g. getting a mortgage.

In RateHub’s survey, 64% of millennials said they used credit cards the most while 40% said they charge 75% or more of their monthly purchases to their cards. There’s nothing wrong with using your credit cards a lot as long as you’re paying your bills in full and on time every month

You don’t even need to use your credit card that much to build up your credit score. There’s no requirement to use your cards on a regular basis, credit bureaus just want to see that you’ve actually used your cards responsibly.

Final word

Although millennials do have more payment options these days, having a credit card is still vital. That being said, if you know you have a shopping problem, you need to be very careful about how you manage your credit. Building a good credit score is important but you don’t do that by making just the minimum payments on your cards.

By | 2016-12-06T23:57:00+00:00 July 6th, 2016|Credit cards, Personal Finance, Young Money|


  1. Sarah @ Couple of Sense July 11, 2016 at 8:10 pm - Reply

    I charge all purchases to my credit cards and I only have 2 and pay them off every month. I didn’t get a card until I was 24 though. I wonder how many of those surveyed in the US were denied cards. I know I was denied for my first 2 credit card applications when I was 19 and 22. I wonder if the banks are more strict with giving out credit and since the job market isn’t the best they don’t have a lot of options. Just a thought.

    • Barry Choi July 11, 2016 at 8:36 pm - Reply


      These days it feels like banks are practically giving credit cards away.

  2. Potato July 13, 2016 at 11:54 pm - Reply

    Such a huge difference between Canada and the States! That Bankrate survey found that the rate amongst millennials was about half of the older rate (i.e. about 2/3rds of Americans have a credit card) — which is still well below the near-100% rate in Canada.

    There are nearly 200 million Visa and Mastercard cards issued in the US, and 72 million in Canada (for a tenth the population)! And that’s a difference that existed before the global financial crisis. No idea how to explain that.

    • Barry Choi July 15, 2016 at 8:57 am - Reply


      Yeah the numbers are nuts. Guess Canadians love debt.

  3. […] Are Millennials really not using credit cards? […]

  4. Tawcan July 15, 2016 at 7:48 am - Reply

    Wow I didn’t realize the difference is that huge. That’s crazy. I think credit cards get a bad vibe because all the financial gurus are telling people not to use credit cards.

    If you’re responsible and always pay your credit card balance in full, I don’t see any problem of using a credit card, especially if you can accumulate rewards.

    If you can’t pay balance in full, that’s a different story.

    • Barry Choi July 15, 2016 at 9:04 am - Reply


      I guess the biggest difference in the U.S. is that many people witnessed what debt can do to you. It’s true if used responsibly, they can be a great tool.

  5. Chonce July 15, 2016 at 9:44 am - Reply

    The results of that survey is kind of shocking to me, but I sort of understand because I used to be afraid of using credit cards because I heard so many horror stories from people who misused them and either got into debt, messed up their credit, or both. I think people just need to learn how to use credit cards the right way and perhaps just start slow with one card like you said.

    • Barry Choi July 15, 2016 at 9:49 am - Reply


      Yes, the U.S. took a big hit after the recession and it hasn’t quite affected Canadians yet. That doesn’t mean we’re more responsible, it just means some of us are on borrowed time.

  6. Susan July 30, 2016 at 2:07 pm - Reply

    Hi. I am a Dave Ramsey listener and he is anti credit card. According to him the visa debit system in the US can be used anywhere Visa is used. I have not found that to be the same in Canada. For example, not all Canadian web stores will accept the Visa debit card since we use the Interac system for debit in Canada. A friend recently told me she has had a different experience and has been able to use her visa debit on Canadian websites. As far as building credit Dave Ramsey discusses manual underwriting as a solution to a lack of a credit score. I don’t believe that to be the same in Canada. I wonder if Visa Debit contributes to your credit score at all.
    My 20 year old son has a visa credit card and seems to be handling it well. I am worried as I did not handle credit well as a young person. My parents did not use credit at all except for a mortgage so my generation did not learn credit card skills. Also with cars costing as much as a house used to, car loans and leases are a problem too. I am working very hard to teach my children how credit works and how to manage it. They don’t teach that in school either.

    • Barry Choi July 30, 2016 at 2:56 pm - Reply

      Hi Susan,

      Visa debit does not get reported to the credit bureaus since those are one time purchases. You can build your credit via pre-authorized payments from your bank account e.g. cell phone bill and Netflix but that’s only assuming those companies report your payment history to the credit bureaus. Credit cards are the easiest way to build your score so it’s good to hear that your son has it figured out.

  7. Kathryn October 23, 2017 at 11:49 am - Reply

    It took everything to get my hubby to stop using debit at the grocery store and to use credit cards.
    I showed him groceries 1x a week =4 transactions a month which lead to bank fees if youre not careful.
    If he charged every grocery stop, he only had to do 1 transaction to pay off the credit card.
    Also instead of any bank fees hed be getting 1% cash bank (so if you spend $100/week=$5200=$52 in rewards, free money)
    As long as he had money in the bank to buy groceries, he could pay the credit card (no interest) and could build up his credit score.
    I think millenials may be scared because their elders were buying things they couldnt afford with the cards (tvs stereos etc) that they saw how much interest and grief it caused.
    If they can be shown only to buy what they can pay off every month… they could really love credit cards again 🙂

    • Barry Choi October 23, 2017 at 12:50 pm - Reply


      All great points. Some millennials were taught to fear credit (especially after the financial crisis), but if used responsibly, credit cards are a great tool.

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