Are the notoriously credit card-shy millennials getting more comfortable with debt?


A new survey has found that two out of three young adults now use credit cards, up from just half of them in 2013. And for the first time since 2009, consumers between the ages of 25-34 are more likely than the average consumer to reach for plastic, according to a new survey by Maynard-based payments consulting company Mercator Advisory Group.

“There’s been a return,” said Karen Augustine, a manager at Mercator and author of the report. “Millennials are changing their lifestyles and they want credit.”

Mercator surveyed more than 3,000 consumers for its annual credit-card survey. It found that 63 percent of households overall used a credit card, up slightly from 60 percent in 2013. Sixty-five percent of young adults said they used a credit card.


After the Great Recession in which they saw their parents lose their homes, delay car purchases, and cut back on spending to pay off debt, many young adults put their credit cards away -- or never applied for one.

According to the latest data available from the Federal Reserve, 37 percent of households under 35 had credit card debt in 2013, down from 49 percent in 2007 -- the lowest level since the central bank started keeping track in 1989.

Many younger consumers opted for debit cards instead, ensuring that they only spent what they had in their bank accounts. Financial analysts wondered if the financial crisis would transform them, just as those who lived through the Depression remained thrifty for years after.

Millennials also faced other roadblocks to credit. Many were weighed down by student loan debt, which has grown to $1.3 trillion, and were reluctant to borrow more. And new financial regulations tightened requirements on banks issuing credit cards, with tighter income standards for borrowers and bans on banks marketing on college campuses.


Renewed interest in credit cards from young adults may be driven by the rise of online shopping, Augustine said, where credit cards seen as offering more fraud protection than debit cards. Lenders have also boosted rewards program, offering cash back, airline tickets, and event passes to lure new customers.

Establishing a payment history with a credit card can help borrowers more easily qualify for other loans, including mortgages.

Still, not all young people have hopped on the credit card bandwagon. According to the Mercator survey, only 47 percent of 18-to-24 year olds said they used a credit card, the lowest of any age group, although that number is also slowly increasing.

Whether the credit card resurgence among young consumers means that they will fall into the same debt traps as previous generations is unclear, Augustine said.

They also offer older adults an important lesson in dealing with credit card companies: always negotiate.

According to the survey, young adults are at least twice as likely as older customers to have called up their card company and successfully haggled over fees and interest.

“Young adults are more money conscious,” she said. “They’re looking for more control of their financial management.”

Deirdre Fernandes can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.