Though 82% of millennials believe society will eventually become cashless, TD Bank’s Consumer Spending Index revealed that they’re lacking when it comes to building and maintaining healthy credit habits.

As the generation least likely to carry cash, according to the survey, this begs the question of whether millennials are armed with the proper tools to be responsible card holders.

TD Bank’s 2019 Consumer Spending Index revealed that millennials need some guidance when it comes to building and maintaining healthy credit habits.

Among concerning credit habits of millennials, included:

  • Twenty-three percent of millennials don’t have a credit card, and they’re the generation most likely to prefer cash (26%) while traveling
  • Half of millennials use between 31% to 90% of their credit limit, surpassing the recommended utilization rate of 30% or less
  • Nearly one-third (32%) of millennials don’t pay their cards off in full each month, which can damage credit health and be costly in the long run, especially in a rising rate environment
  • A quarter of millennials do not know their credit score, which can be a setback when applying for credit cards or loans, getting approved for a mortgage, buying a car, or making other major purchases

“The data is a bit concerning – it shows that a significant knowledge gap exists for millennials when it comes to credit, especially compared to prior generations,” says Mike Kinane, head of US Bankcard at TD Bank. “We’re relying less and less on cash, and while credit cards may not be a millennial’s payment method of choice, it’s still critical that they develop financial knowledge and habits to properly position themselves for sound credit health down the road.”

Despite being more likely than other generations to pay for a group outing in order to earn rewards, 30% of millennials have let their credit card rewards expire (more than Gen X at 14% and baby boomers at 9%). This data point is surprising, given Millennials were the generation most likely to carry a balance on their credit card.

However, millennials were the generation most willing to help their children establish credit through a secured card (45%) or help with student loans (40%).

That said, more than half (55%) of respondents overall say they are not willing to help their children establish credit. This is particularly true for older generations, with 70% of baby boomers saying that they are not helping their children establish credit.

“Perhaps born out of growing up during the financial crisis and feeling the impact of student loans, millennials are driven to set their kids up for financial success and teach them good financial habits,” said Kinane. “Through education and options like secured cards, younger generations can learn the responsibilities of having a credit card and start establishing good credit at a young age. It’s also worth noting that length of credit history is a significant factor in credit scores.”

MARU/Matchbox conducted an online survey for the first wave of this study between March 22 and March 28, 2017 and interviewed 1002 consumers. A second wave of this study was conducted between August 20 and August 30, 2018 using the Springboard America panel to speak with 1,000 consumers.