Infographic: Millennials, once credit-shy, have gotten over it


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Research shows the under-36 crowd is eager for rewards

By Sabrina Karl  |  Published: March 6, 2018

Sabrina Karl

Personal Finance Writer
Data whiz and visual storyteller


credit cards are nothing new, but according to new research from Aite Group, 2017 saw rewards cards offering greater riches, and saw millennials – once characterized as credit-card-shy – embrace them. 

rewards card market saw banks offering a lot of very rich incentives in 2017, and
also a lot of multi-promotion offers,” said Kevin Morrison, a senior analyst at research and advisory firm Aite Group. “So not just 0 percent interest for a year, but that plus a points bonus after spending X dollars in the first
three months.”

a low or nonexistent annual fee trumps rewards. When asked how important
different factors were in weighing rewards card offers, 85 percent of
cardholders said it was extremely important that the card carried no or a low
annual fee. The type of reward offered came in slightly below at 82 percent,
while interest rates ranked third as extremely important to 62 percent of
cardholders. (Story continues below.)

What matters most to card owners

Millennials applying for credit cards at a rapid clip

Millennials have been given the tag of being credit-shy. One thing is clear from the Aite Group data: They’ve gotten over it.

Millennials are making a strong showing in applying for rewards cards, with plenty of room still to grow for the 18- to 35-year-old demographic. 

all rewards cardholders, about 1 in 3 applied for a rewards card within the
last year (29 percent). Among millennials, however, the share jumped to 45
percent, and over the last two years, 78 percent of millennials report they’ve
applied for a rewards card.

of these young cardholders (63 percent) applied online. Still, about half say
their newest rewards card is issued by their primary bank. One explanation
offered by Morrison is that young consumers often obtain their first credit
card with the involvement of their parents, who help set their child up with
their own checking account and credit card all at once with the same

millennials in credit-building mode, only 52 percent reported holding more than
one rewards card. Considering the share is 63 percent among all respondents,
significant opportunity appears to exist for matching up millennials with additional
rewards cards.

But 2018 could be a different year for
the rewards card market.

“After rolling out these incentives and
multi-promotion campaigns, issuers will monitor their card portfolios to
determine the impact of this type of marketing,” said Morrison. “When 7 out of
10 – or 8 out of 10 for millennials – say their latest card became
top-of-wallet, that’s music to a bank’s ears. But the proof in the pudding will
be the longer-term retention rates.”

Aite Group
released its report, “
Loyalty & Rewards in the Digital
Age: U.S. Consumer Credit Card Rewards Study
,” Feb. 1, 2018, drawing on results from its survey of 1,464 users of rewards and
loyalty-branded credit cards in the third quarter of 2017.

millennials embrace rewards

See related: Infographic: Credit card love from older millennials, Millennials’ most common debt: Cards, not student loans, What millennials can teach us about credit, More infographics

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