Credit Cards a Declining Preference in Mobile Payments for Millennials
The credit card, ever since its inception, has proven to be both blessing and curse, depending on who you ask, and sometimes, when you ask the same person. New research from WalletHub says that this mobile payment system is falling out of favor among the millennials, and in a big way.
The WalletHub study notes that, if you’re 29 or younger, you’re 93 percent more likely to not like the credit card than someone 59 and up. Perhaps the biggest reason for this, according to Ohio State economics professor Lucia Dunn, is that younger people have a tougher time managing credit card debt. Thus, they’re more likely to avoid credit cards altogether. Watching their parents face credit card bills back during the Great Recession of 2008, and potentially not do so well at it, may likewise have tainted the pool for these credit instruments.
The numbers get more pronounced from there; for baby boomers, they’re fully 479 percent more likely than millennials to consider credit cards worthwhile thanks to their sheer convenience as measured against cash. Priorities in card issues were different as well; when asked whether rates or rewards make the better card, a majority—58 percent—of baby boomers said rates, while the slim 51 percent majority of millennials said rewards.
Even memories are skewed in favor of the boomers; 80 percent had more good memories of credit cards than bad, while only around 60 percent of millennials could say likewise.
With Americans pushing credit card debt to new record levels—it’s already up over $1 trillion, based on word from the Federal Reserve—attitudes about credit cards are also changing. It’s interesting that millennials would be so opposed to credit cards yet so enthused about mobile payments, but mobile payments can be readily tied to a debit card as well as a credit card. Still, this isn’t great news for the credit card companies; if they end up with a “lost generation” of millennials eschewing cards, it could be a hit to the bottom line as boomers start dying off.
Maybe with a few protection measures built in, like longer-term debt repayment or the like, millennials might come around to the credit card the way their parents did. For right now, though, the credit card itself may be on borrowed time.