Credit to their generations: The Millennials

How the Millennials view credit

How age sets attitudes toward credit, debt
The Greatest Generation, Silent Generation
Greatest, Silent generations (1911-1945)
Baby boomers
Baby boomers (1946-1964)
Generation X
Generation X (1965-1979)
Millennials (1980-2000)

The Millennials (1980-2000)

What they buy with their credit cards:  A lifestyle

The Millennial mindset: Thom Fox, a community outreach coordinator at the Cambridge Credit Counseling Corp.,  doesn't like what he sees when he speaks to groups of young people at high schools and colleges, or when some of them traipse into the debt counseling center. "They have the biggest disconnect with how money works because of their parents," says Fox of the group (also known as Generation Y), which ranges from 7 to 27 years old.

Millenials and credit. Illustration by Brandy Kesl"There are a lot of parents, maybe because they feel they can't spend enough time with their kids, who buy them the newest of everything. I call it guilt shopping. I won't even buy an iPhone for myself because it's $400, and I'll ask kids at high schools and colleges how much theirs is, and they'll say, 'Oh, I don't know. Mom and Dad paid for it.'"

What Fox says seems to be backed up by some seriously large numbers. In a 2004 study of credit card usage by undergraduates, conducted by the student loan lender Nellie Mae, 56 percent of freshmen reported that they started using their first credit card at age 18.  By the time a college student is in senior year, 56 percent of them have four or more cards with an average balance of $2,864.  So they're leaving college owing more than $8,000 and that likely doesn't include student loans.

Harrine Freeman, CEO of H.E. Freeman Enterprises LLC, a personal finances services company, says that part of the problem is that the Millennials are quickly being taught to use credit cards as their primary means of payment. "They often use their parent's credit card or get their parents to co-sign for a credit card," she says.

In fact, according to the National Bankruptcy Research Center, adults from 18 to 24 are the fastest-growing group of credit card users and bankruptcy filers.

Of course, some Millennials deserve credit -- for using credit wisely. "I use credit cards for pretty much everything -- not the ability to pay over time, which I do, but for the ability to track and record my spendings," says Jeff Wilhem, 25, and vice president of IT at Accudata Integrated Marketing in Rhode Island.

Still, Laura Capp, 26, could probably speak for her age group when she talks of how she and her Generation X fiance use their credit cards, which is to say frequently, though the Pittsburgh resident is quick to note that her and her significant other's debt isn't out of control -- not yet, anyway.

"We bought a house back in August and shortly after that, we furnished the new house with a flat-screen TV, carpet and new appliances with our credit card," says Capp, who works in public relations. "We are trying to save our 'actual' money for our wedding in August 2008. So we end up using credit cards as temporary loans to get through these first few years. Our plan is to pay off our credit cards as soon as possible after we're married."

Capp says that she and her fiance have talked at length about their plans for getting out of debt, but she sounds resigned that it may be a long, long time before her generation learns the art of mastering credit card debt.  "For now, it's just a fact of life," says Capp.  "I'd say right now, eight out of 10 purchases we make go on our credit cards, and that includes everything from groceries to a $3 latte to drinks at the bar with friends. It sucks, but it's life."

Main story: A credit to their generations.

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Updated: 01-20-2018