Young Australians turning away from credit cards

Millennials have been unfairly stigmatised as poor money managers, according to a new report commissioned by Afterpay.

The report, How Millennials Manage Money, found that millennials are more responsible than some believe.

According to the report, 41 per cent of millennials own a credit card, compared to 66 per cent of older Australians.

Of those millennials who don’t have a credit card, only 9 per cent were unable to get one. The breakdown of the remaining 91 per cent was:

• 24 per cent prefer to use their own money
• 22 per cent want to avoid interest/fees
• 21 per cent want more control over their spending
• 18 per cent are worried they will get into too much debt
• 6 per cent find it too hard to understand how credit cards work

Another finding contained in the report was that credit card debt as a share of income is lower for millennials (10 per cent) than older Australians (19 per cent).

Also, regular saving is practised more often by millennials (36 per cent) than older Australians (28 per cent).

The report argued that while millennials are stereotyped as “lazy, lavish, and ‘live for today’”, they just have different spending priorities to previous generations.

“Millennials have responded to the high cost of housing by delaying home buying. Only about 45 per cent of millennials own a home, versus more than 60 per cent of young people 40 years ago,” according to the report.

“Millennials are also cutting back on some discretionary purchases. Compared to previous generations, millennials spend 16 per cent less on alcohol and 71 per cent less on cigarettes.

“The areas of spending for millennials that have seen the biggest increase are public transport (up 24 per cent) and private health insurance (up 23 per cent).”

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