THE BLOG
10/24/2014 09:34 am ET Updated Dec 06, 2017

Generation Gap: How Your Age Affects How You Use Credit Cards

This country is billions of dollars in debt to the credit card lenders, which is a staggering number. How do you get to a point where the majority of Americans have over $10,000 in credit card debt? Who is to blame? A glimpse into the generational divide helps shed some light on the situation.

In a recent poll we conducted with around 3,000 of our readers, we asked the different generations about their relationship with their credit cards. Here's what we found:

Millennials: The youngest generation tends to understand less of how credit cards work, but they are smarter about not taking on too much credit (they generally only have 1-2 credit cards) and are more diligent about paying on time than the generation before them. They also tend to blame poor financial education on America's rising credit card debt.

Generation X & Y: The middle of the generational spectrum tend to do worse with credit cards. They generally don't pay their entire balance each month and are more likely to dip into savings to pay off credit card debt. The younger of the two generations also tends to blame high interest rates and fees from the credit card lenders for the country's debt instead of poor financial education or mismanagement from the cardholders.

Baby Boomers: With a life of experiences to help guide them, the Baby Boomer generation is the most savvy at using credit cards. They understand how the cards work. The have the highest percentage of paying off their balance each month and not dipping into savings to pay off credit card debt. They also place the blame for credit card debt on cardholder mismanagement. They do tend to have the most credit cards of any generation, though.

As they say, with age comes wisdom, which explains why the Baby Boomers are so much better at handling their credit cards. However, there is something to be said about the younger generation understanding their own limitations when it comes to credit. They are growing up in a world with massive amounts of credit card debt, and they recognize that and are trying to break the cycle. The Millennials have one thing right; we need better education around not only credit cards, but all areas of personal finance.

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