Millennials Reject Credit Cards and Credit Card Debt

No Credit Card Debt For Millennials

If you want to break up the loud party that your neighbor’s millennial kid is throwing in his basement bedroom, don’t call the cops.

Just barge over and pass out credit card application forms. All those 20-somethings will hop in their sub-compact electric cars and scurry back to their own parents’ basements.

But enough basement jokes. I am not here to ridicule millennials. I am here to praise them (though the Pew Research Center did find that 36% of Americans 18 to 31 are living in their parents’ homes, a four-decade high).

Millennials have a trait that Generation Xers and Baby Boomers should emulate: Credit cards give them the heebie-jeebies.

Credit card debt for Americans under 35 is at its lowest level since 1989, according to Federal Reserve data analyzed by the New York Times. Another study found that one-third of Americans ages 18 to 34 have never even applied for a credit card.

Experts said that’s largely due to the 2008 financial meltdown. Young people saw their family and friends laid off in waves. “For Sale” signs sprouted like mushrooms in front of foreclosed houses around their neighborhoods.

To paraphrase that Civil War millennial Scarlett O’Hara after Rhett Butler left her at a burned-down Confederate outpost, “As God is my witness, I will never be hungry again even if it means I have to drive a Prius hybrid, vote for Bernie Sanders and pay for everything with cash.”

(Forgive me for referencing a 1939 film, but it transcends generations.)

The sad fact is America is awash in red ink. Household debt increased by $35 billion in second quarter of 2016, up to $12.29 trillion overall. Millions have had to turn to debt management programs for help.

I admire millennials for trying to avoid becoming credit card zombies. Though according to the Times, financial poobahs found this trend disturbing. They fear that young people won’t develop a “comfort level” with credit.

Yikes. Getting comfortable with credit cards is like getting comfy with a dozen doughnuts. One charge leads to another, then before you know it you are financially bloated and being charged 23.9% interest for that privilege.

Who needs that kind of comfort?

Here’s the challenging part, millennials – You do.

No, you don’t need to charge your way into the abyss. You just need to recognize the difference between debt (BAD!) and credit (GOOD!).

The fact is, eventually you’re going to want to move out of your parents’ house, lease an apartment, buy a real car and maybe even buy a house or start a business. Unless you’ve invented a video game app and sold it to Google for $3 billion, you’re going to need to borrow money for any of those things.

To do that, you have to prove you’re a reliable and trustworthy risk. The way lenders decide that is by checking your credit history.

If you don’t have one, or it’s pockmarked with bills you blew off in college, you’ll pay hundreds or thousands of dollars more in higher interest rates on loans for big-ticket items. The other option is to throw up your hands in despair and live forever in your parents’ basement.

As much as you millennials may hate credit cards, they are almost indispensable if you want to establish credit. But getting one does not require you to abandon your principles and become a charge-a-holic like generations of consumers before you.

Just apply those principles to your credit card. Have the discipline and determination to pay off your credit cards every month, or to keep a low balance. Pay every bill on time, and watch your credit score rise.

Like it or not, that is how financial game is played in the real world. It has produced a lot of casualties over the years, but if you play the game right, you have nothing to fear with credit cards.

Just remember, millennials: You use them. Don’t let them use you.

Now get back to the party.


Popper, N. (2016, Aug. 14). How Millennials Became Spooked by Credit Cards. Retrieved from

(NA, ND). What’s In My FICO Score. Retrieved from

Fry, R. (2016, May 14). For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18-to-34-Year-Olds. Retrieved from

Karen Carlson

Karen Carlson is a personal finance expert and writer. Her financial advice has been published in Time, US News & World Report and Fox Business News. Carlson is an Emmy Award-winning producer of educational television and recent nominee for NFCC Financial Educator of the Year.