Millennials have been accused of disrupting many industries, from newspapers to brick-and-mortar stores. Credit cards appear to be next in line. File Image.
INTERNATIONAL - Millennials have been accused of disrupting many industries, from newspapers to brick-and-mortar stores. Credit cards appear to be next in line.

Just one out of three millennials carries plastic, according to a Bankrate.com survey, compared to the majority of older Americans. In addition, a Fed survey found the 18 to 24 demographic generation preferred to pay cash more than others. And if they do carry a card, it tends to be of the prepaid or debit variety, TD Bank found.

None of that bodes well for banks like JPMorgan Chase & Co, or payment networks like Visa and MasterCard, since the fees they earn from debit card transactions are less than those earned via credit cards. The 2008 global financial crisis and ballooning college tuition may have also scared some millennials away.

“They experienced the Great Recession just as they were beginning school or starting their career, pondering about buying a home,” said Erin Currier, director of financial security and mobility at Pew Charitable Trusts. “They’re very sensitive to this life experience.”

Millennials are more likely than older generations to have student loans to pay. About 41percent of them held such debt, according to a 2015 Pew report. That compares to, at their peaks, 26percent for Generation X; 13percent for Baby Boomers; and 3percent for the Silent Generation.

And the burden is heavier, too. From 1990 to 2015, student debt for the typical college bachelor's degree increased about 164percent, according to Education Department data.

Those big obligations could explain millennials’ aversion to borrowing, Currier said. Over time, they may never grow as comfortable with credit cards and debt as previous generations have, she said.

TransUnion confirms millennials carry fewer cards and have lower balances than Gen-Xers did when the latter group was aged 21-34.

Millennials have also increased the use of auto and personal loans, TransUnion found, at the expense of credit cards. 

- BLOOMBERG