Millennials and Credit Cards Interview with KNX Radio Los Angeles
CreditCards.com Senior Industry Analyst Matt Schulz spoke on Wednesday, April 15, 2015, with Frank Mottek of KNX Radio Los Angeles about the results of the April 2015 Millennials and Credit Cards survey. The interview and transcript are below.
Frank Mottek: Looks like millennials are shying away from credit cards these days. Matt Schulz with us now, Senior Industry Analyst at CreditCards.com. Matt, tell us about your last survey on the credit card use — or lack of credit card use, as the case may be — and millennials.
Matt Schulz: What we found is that more than one in three 18 to 29 year old Americans say that they’ve never had a credit card. And that’s a big change from years past when it used to be that every college kid’s dorm room mailbox was filled with credit cards and campuses were filled with banks and credit card issuers handing out Frisbees and t-shirts when you signed up for a new card.
Mottek: Millennials are smarter than the rest of us then?
Schulz: Well, millennials certainly seem to be cautious, and it’s understandable since they’ve come of age during the Great Recession and the really horrible job market that they and their friends have faced. A lot of that skittishness has pushed them towards debit cards and prepaid cards and away from credit.
Mottek: Very interesting, and of course during the credit crisis, the joke used to be that the banks are sending out free declined applications when in the past of course they had that pre-approval bonanza for awhile. So that must have impacted millennials too, right?
Schulz: Sure, and then you add in the fact that there are now regulations that make it harder for somebody under 21 to even get a credit card because right now if you’re under 21 to get a credit card you have to show proof of income or get a cosigner in order to get a card. That certainly wasn’t the case in the past.
Mottek: Alright, and obviously a lot of millennials are having trouble getting jobs so the job picture has impacted their credit use, too, right?
Schulz: Yeah, no question. If you’re having trouble finding a job or a well-paying job, the last thing you want to do is expose yourself to spending money that you don’t have so that has kind of pushed them towards debit cards and prepaid cards even.
Mottek: How is the credit card business responding to this trend?
Schulz: Well, it’s interesting. They are certainly putting things out there to try and attract millennials, but the big question is, will millennials stay away from credit as the economy improves and their careers advance or will they eventually move more towards credit cards in search for greater consumer protection and greater rewards? Things like cash back and frequent flyer miles and that sort of thing.
Mottek: Matt Schulz, Senior Industry Analyst at CreditCards.com. Look forward to your next update.