Why Do Gen Xers and Baby Boomers Rely on Credit Cards More Than Millennials?

Why Do Gen Xers and Baby Boomers Rely on Credit Cards More Than Millennials?

Man using a credit card in front of his laptop

Kids these days just don’t know how to manage their money, right?

Actually, it might be the adults who are having the most difficulty keeping their finances in check — in fact, according to a new survey by Allianz Life Insurance Company of North America, Generation X (ages 35 to 48) actually thinks that high credit card debt is a normal aspect of covering finances.

Financial Adviser reports that 76% of Gen Xers began opening credit cards between the ages of 18 and 24, while only 68% of Baby Boomers (ages 49 to 67) did so.

36% of Gen Xers reportedly have at least $5,000 in credit card debt, and 25% admitted that they have more than $10,000 — which isn’t surprising, considering that in 2012, the average American home had two credit cards (and nearly a third of all households had at least four credit cards).

And even though Baby Boomers seem to manage their debt a bit better than the younger generation of adults, it seems that neither generation feels confident managing finances without the help of a credit card;USA Today reported that 48% of the Gen Xers and Baby Boomers in the Allianz survey stated that credit cards “now function as a financial survival tool.”

Millennials, on the other hand — that tricky group of young adults between the ages of 18 and 34 — have stayed far away from credit cards when possible. U.S. News and World Report recently stated that more than one-third of 20-year-olds have never had a credit card, and that the majority of Millennials are “skeptical” of Wall Street.

Rather than handing their bills and taxes over to a financial adviser, Millennials are more likely to do their own research on the stock market and to manage their own money using low-cost mobile apps.

Most of these young adults were just entering the job market when the Great Recession hit, so they know how important it is to spend money and stimulate the economy — but they also seem to have a more positive outlook than Gen Xers and Baby Boomers when it comes to managing debt.

Many consumers in older generations, however, witnessed their savings and retirement plans completely drain out when the stock market tanked; with so much taken away so quickly, perhaps it’s hard not to adopt a pessimistic attitude.

Staff

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