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Cardtronics Blog

Risk Aversion May Lower Holiday Credit Card Debt for Millennials

01/23/2018 - Tom Pierce

Consumers often overspend in the excitement of holiday shopping, particularly when using credit cards. That was certainly the case this holiday season, as Americans racked up an average of $1,054 of debt over the holiday season, about 5 percent more than last year, according to MagnifyMoney's annual post-holiday debt survey.

Interestingly, millennials may be better off than other generations when the credit card bills start arriving this month.

millennial happy credit reportGenerational studies show that the nation’s largest demographic group – adults under 35 who number 75 million strong – are more risk averse than older generations and tend to use cash or debit cards rather than credit cards. For instance, Cardtronics' 2017 Health of Cash Study found that millennials prefer cash above all other payment methods.

Millennials are hesitant to use credit, with just 17 percent using credit cards as their preferred payment method vs. 29 percent for cash and 26 percent for debit cards. Even more telling, two-thirds of millennials don’t even have a credit card, as revealed by a 2016 Bankrate survey.

The Federal Reserve of Boston also found millennials have lower adoption rates of credit cards than other cohorts, and according toLegg Mason’s Global Investment Survey, 85 percent of millennials consider themselves “conservative” in their risk tolerance, a higher percentage than that listed for Baby Boomers.  

So why the aversion to credit cards, and more broadly, debt? Several factors explain why millennials increasingly pay with cash or debit and avoid credit. One key reason: Many grew up or were looking for a job during the deep recession a decade ago and now favor retaining cash. Others also are paying off student loans and are wary about assuming more debt. 

Millennials’ preference for cash surfaces in several ways. Our 
2017 Health of Cash Study found that 70 percent are likely to take cash with them when they go out on weekends, and more than two-thirds get upset when establishments don’t accept cash. 

So, thanks to the generation’s risk aversion and tendency to use cash or debit cards rather than credit cards, millennials may truly experience a happier New Year – especially when it comes to paying holiday shopping credit card bills. 

Tom Pierce
Chief Marketing Officer