Infographic: Millennials, once credit-shy, have gotten over it


Research from the Aite Group shows the under-36 crowd is eager for rewards

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Rewards credit cards are nothing new, but according to new research from Aite Group, 2017 saw rewards cards offering greater riches, and saw millennials – once characterized as credit-card-shy – embrace them.

“The rewards card market saw banks offering a lot of very rich incentives in 2017, and also a lot of multi-promotion offers,” said Kevin Morrison, a senior analyst at research and advisory firm Aite Group. “So not just 0 percent interest for a year, but that plus a points bonus after spending X dollars in the first three months.”

Still, a low or nonexistent annual fee trumps rewards. When asked how important different factors were in weighing rewards card offers, 85 percent of cardholders said it was extremely important that the card carried no or a low annual fee. The type of reward offered came in slightly below at 82 percent, while interest rates ranked third as extremely important to 62 percent of cardholders. (Story continues below.)

What matters most to card owners

Millennials applying for credit cards at a rapid clip

Millennials have been given the tag of being credit-shy. One thing is clear from the Aite Group data: They’ve gotten over it.

Millennials are making a strong showing in applying for rewards cards, with plenty of room still to grow for the 18- to 35-year-old demographic.

Among all rewards cardholders, about 1 in 3 applied for a rewards card within the last year (29 percent). Among millennials, however, the share jumped to 45 percent, and over the last two years, 78 percent of millennials report they’ve applied for a rewards card.

Most of these young cardholders (63 percent) applied online. Still, about half say their newest rewards card is issued by their primary bank. One explanation offered by Morrison is that young consumers often obtain their first credit card with the involvement of their parents, who help set their child up with their own checking account and credit card all at once with the same institution.

With millennials in credit-building mode, only 52 percent reported holding more than one rewards card. Considering the share is 63 percent among all respondents, significant opportunity appears to exist for matching up millennials with additional rewards cards.

But 2018 could be a different year for the rewards card market.

“After rolling out these incentives and multi-promotion campaigns, issuers will monitor their card portfolios to determine the impact of this type of marketing,” said Morrison. “When 7 out of 10 – or 8 out of 10 for millennials – say their latest card became top-of-wallet, that’s music to a bank’s ears. But the proof in the pudding will be the longer-term retention rates.”

Aite Group released its report, “Loyalty & Rewards in the Digital Age: U.S. Consumer Credit Card Rewards Study,” Feb. 1, 2018, drawing on results from its survey of 1,464 users of rewards and loyalty-branded credit cards in the third quarter of 2017.

millennials embrace rewards

See related: Infographic: Credit card love from older millennials, Millennials’ most common debt: Cards, not student loans, What millennials can teach us about credit, More infographics

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more