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Young Millennials Becoming More Responsible with Credit Card Debt

Andrea Booker |

Young adults, in response to the economic downturn, are beginning to be more cautious about their credit spending. As a group, they’ve grasped the seriousness of the financial crisis and want to be sure they don’t make the same mistakes as previous generations with regard to debt.

According to a Yankelovich study, 52% of Young Millennials (19-to-25-year-olds) characterize themselves more as savers than as spenders. The same source indicates that at the height of the recession, 59% felt the need to strongly or moderately reduce their debt level—decreasing their willingness to spend as freely as they once did.[1]

But are Young Millennials actually deep in credit card debt?

Experian/Simmons data indicates that the average bankcard balance for 18-to-25-year-olds in 2010 was $1,852, up just 0.5% from 2009 when the average balance was $1,844. It seems more likely that student loan debt is at the core of Young Millennials’ debt concerns.

According to a recent New York Times article, students graduating from Bachelor’s degree programs had an average cumulative debt of $24,000. With two types of debt hanging over them, these young adults have learned to be careful financial managers. The Yankelovich Millenials Ahead study indicates that many of these young consumers (18-to-24-year-olds) are credit card transactors: 52% say they pay the full balance each month.[2]

These young adults are seeking partners to help them navigate the financial landscape. According to a 2010 College Board report, “the median earnings of bachelor’s degree recipients working full time year-round in 2008 were $55,700”—making their debt-to-income ratio quite low in spite of their debt anxiety. If banks present themselves as allies, teach responsible financial behavior, and provide financial management tools, they can forge stable relationships with young consumers who have the potential to become loyal lifetime customers.


[1] The Futures Company, Yankelovich MONITOR Minute, “Younger Millennials in the Jobless Recovery: Are We Headed for a ‘Lost Generation’?,” August 30, 2010.

[2] The Futures Company, “Understanding Financial, Brand, and Information Attitudes of Young Adults (18-39)”, June 2010.

Also appears on The Heart of Commerce Blog.

Topics: Credit

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