Exploring credit card behaviors of millennials in the United States

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University of Alabama Libraries

Consumer credit is not a new concept in the United States. It has evolved over time from basic installment plans, which allowed consumers to pay off their purchases incrementally, to the more complicated and increasingly prevalent credit cards in today’s society. This study investigated the credit card behaviors of Millennials, individuals born between 1981-1997 (Pew, 2015), in the United States. Specifically, the main focus of this study was to see if Millennial respondents had a credit or debit card, outstanding balance on credit cards, and if they have a revolving amount of credit. For multivariate analysis, demographic control variables as well as unfavorable credit attitude, and risk tolerance were included in the analyses. Findings from the 2013 Survey of Consumer Finances (SCF) showed that as the age of Millennials increases, the likelihood of having a credit card and the amount of credit card outstanding balance increased. The households with higher education levels had higher credit card balances. Single males and females were less likely to use credit cards than married couples and carried lower balances than married households. White households were more likely to use credit cards and have credit card balances than other ethnicities, but were less likely to have revolving credit. This study provides characteristics and behaviors of the Millennial Generation as they relate to credit consumption and debt management compared to those of the rest of the U.S. population. This helps show the credit attitudes of Millennials as well as how Millennials view and use credit including whether or not they have learned to use credit cards responsibly. This is useful information for those who want to create a credit savvy population and educate about the adverse effects of carrying large amount of debt. Further, this study provides important insights for financial planners to determine why certain demographic characteristics and other factors cause Millennials to treat credit differently than previous generations. This information will allow financial planners to target needs that are specific to Millennials and offer them financial advice that is the most valuable and significant.

Electronic Thesis or Dissertation
Behavioral sciences, Finance, Home economics