None of us like credit card debt, but one demographic seems particularly good at avoiding it — Millennials. Having experienced both an economic boom and subsequent bust, studies show that Millennials — also known as Generation Y — are understandably leery of taking on debt when it’s become crystal clear to them that the financial future is such an unknown.
As reported by The Los Angeles Times, instead of using credit cards for everyday expenses, Millennials tend to opt for cash, made easier by their spendthrift nature. To stretch cash its furthest, they clip coupons, shop thrift stores, and make what they can from scratch.
Beyond the impact of the boom-to-bust economy, Millennials are further financially jaded by student loan debt that now exceeds credit card debt for the first time in U.S. history. In fact, college graduates are having such a tough time paying off the rising cost of tuition that many experts believe student loan debt — representing the education of Americans intended to help us grow the economy — could pose the biggest of all economic threats. Not only do Millennials avoid charging up credit cards, but they also prefer to to forego the purchase of bigger ticket items, including homes, which could prove particularly harmful to the still-struggling housing market.
This frugal behavior among Millennials is the polar opposite of older Americans who are increasingly in need of help getting out of debt. Those 50+ have an average credit card debt of $8,278, while those under 50 carry credit card balances totaling just $6,258.
If you are of the Millennial generation, what’s your take on credit cards, and debt in general? Does this attitude and behavior extend to other types of loans? Why or why not?