Eight out of ten Millennials (25-34 years old) use credit cards to fund their lifestyle with nearly four out of ten likely to apply for a new credit card over the next 6 months.
FICO’s latest consumer research on finance trends also found Millennials prefer new credit cards that offer: waived annual fees (85% of respondents); cash back rewards (75%); and lowest interest rates (73%).
About 31% of consumers 25-34 years old carry a balance of $1,000-$4,999 over each month, on their credit card. This was significantly more than all the other age groups with only 22 to 23 percent holding the same debt level. The 25-34 year olds also had more balances in the $5,000-$9,999 range but fell to second place when balances went over $10,000; the top spot went to the 35-49 year olds.
According to the study, about half of Millennial respondents 25-34 have at least three cards, and 19% plan on using them to buy big ticket items such as a new car. 37% of this group also said they were ‘very likely’ to apply for a new credit card over the next six months. This was nearly double the number of young Millennials (21%) or middle aged respondents (20%).
With 49% of Millennials holding between three and five credit cards, lenders are competing for share of wallet.
Millennials are focused on no annual fee (75%), low interest rate (71%) and cash back rewards (71%).
By comparison, younger Millennials (aged 18-24) are even more focused on price, with 80% stating they are after no annual fee and 79% looking for low interest rates.
The survey also showed that Millennials want credit cards that offer account notifications (56%) and enhanced security (53%). A poor mobile banking experience is also likely to see them switch banks more than other groups.
Additionally, the data revealed that Millennials are significantly more interested in “self-managing” credit card controls than older consumers. About 47% were interested in being able to turn on or off the use of their card at certain merchants, while 45% wanted to be able to control the type of purchases that are made on their cards.
Automated notifications about late payments were seen as a popular and desired feature to help Millennials stay on top of their accounts in a way that was convenient and free of embarrassment. 22 percent indicated they would want to be notified by mobile app of debts under 90 days.
When it comes to late payments, it is worth noting that one in five Millennials (25-34 years olds) self-reported events that put them in the high risk category for financial delinquency. In addition, 26% of those 18-24 and 17% of those 25-34 are making only the minimum payments each month.
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