Predictive Marketing Blog

Responsible Credit Building Versus Long-Term Debt: Millennials Can Learn the Difference


When Generation X went to college, a common rite of passage was getting access to their parents’ credit card. They were told to use it responsibly for emergencies and school supplies — or else they would lose their spending privileges.

Gen X students also had many opportunities to sign up for school-branded credit cards. Thus, many started their adult lives with credit cards in their wallets, and some carried a lot of debt due to irresponsible spending.

The Millennial Experience

Millennials grew up with a much different experience. The youngest millennials were between 8-13 years old in 2008 and quite possibly the children of parents who didn’t use credit responsibly. They watched their parents struggle with mortgage payments for underwater houses, job losses and massive credit card payments. As such, millennials can have an innate fear of getting into debt.

While more than 40 percent of people under 40 today have student loan debt, only 33 percent of Americans between ages 18 and 29 have a credit card, and many have no plans to apply. These young adults are more likely to make purchases with debit cards, Paypal and Apple Pay, which are linked directly to their bank accounts.

Because of this, bank marketing campaigns require a different approach than they would have in the past — adapt your current strategies to line up with the millennial’s unique perspective, habits and needs.

  1. Give Millennials a Reason to Choose Credit

    Gen X had limited payment methods, so credit cards fit neatly into their daily purchasing activities. In today’s connected age, millennials have far more choices, so you need to give them compelling reasons for taking on credit cards, rather than using options that won’t put them in debt. Rewards programs, zero-percent interest promotions and cash back offers can significantly incentivize responsible card holders. When they’re getting paid to use your products, millennials are more willing to assume risk.

  2. Emphasize Credit History Building

    House and car buying may take place later in life for millennials than they did for Generation X, but building up a solid credit history in anticipation of large purchases remains important. Explain why taking out a credit card well in advance of these life events puts consumers in a better position to receive approvals and lower rates on mortgages and loans.

  3. Educate Millennials About Credit

    Some millennials see credit as the enemy due to the crash in 2008 and their parents’ debt experience. Provide comprehensive resources that teach this demographic about different types of credit, the factors that go into a credit score, and best practices for using credit responsibly. Position yourself as a trusted adviser, and build long-term relationships with prospective customers. Never assume they already know how credit works.

  4. Meet Technology Expectations

    Millennials are used to having 24/7 access to the products and services they use frequently. Make sure your technology meets their expectations by creating user-friendly applications and websites, offering mobile login, and personalizing the experience. You can’t use the same mass marketing approach that successfully wooed earlier generations. Highly targeted, tailored and personalized communications are key. Take the time to understand this demographic’s fears, expectations and needs, and create lasting, mutually beneficial relationships.

In short, the word credit might start as a dirty word for many millennials, but if you take the time to show them that credit cards are worthy of consideration, they’ll come around in the long run.

To learn more about consumer segments like millennial credit users, sign up for our free trial of the Reach Analytics Predictive Marketing Cloud. It’s the only predictive platform available designed specifically for B2C brands. Or Request a Demo for a live walkthrough.