Marketing & PR

Marketing Credit Cards and Loans to Millennials and Gen Z

Greg Kihlström

Millennials are no strangers to debt. With student loan debt ($1.48 billion) at nearly double the total amount of credit card debt in the United States, a large portion student loan debt belongs to millennials. In fact, debt is such an overwhelming influence on millennial thoughts and behavior that a recent survey by Credible showed that debt scares them more than death.

Download our free guide to reaching and engaging Millennials and Gen Z for financial services marketers.


Although millennials have substantial negative associations with debt, as they enter the housing market and start families, they are becoming a growing market for loans and credit products.

Gen Z appears to be more averse to debt than millennials, with 20% saying that debt should be avoided at all costs. Right now, only 30% of Gen Z is in college. his generation will soon experience the same life moments as millennials; it will be interesting to learn whether this opinion holds true, but for now, it’s an important differentiator.

Credit card adoption and usage

The New York Times recently analyzed data from the Federal Reserve and found that Americans 35 and under have the lowest level of credit card debt since 1989. Millennials are the least likely to have credit cards (only 33% do) versus Generation X (50%) and Baby Boomers (70%), according to a 2016 Bankrate survey.

The way younger generations are introduced to their first credit card (or cards) changed in 2009 with the introduction of the CARD Act. This law prevents financial institutions from marketing their products on university and college campuses. This directly impacted the number of credit cards acquired, with the Consumer Financial Protection Bureau writing in 2015 that the share of 18-20 year olds with credit cards had decreased. While the CARD Act doesn’t prevent college students (or other millennials) from applying for credit cards off campus, it certainly has impacted card applications.

In addition, it’s clear that millennials are reluctant to get into debt in the first place. Living through the financial crisis of the late 2000s, seeing the impact ton their families, and needing to assume student loan debt has given millennials lower tolerance for personal debt than previous generations.

Home and auto loans

Let’s clear up a misconception about millennials and home buying: they’re very interested in buying, but fewer follow through because of other financial factors. In fact, a recent study shows that 80% of millennials are interested in buying a home.

Factors preventing buying include lack of ability to to save enough money for a down payment. A major contributing factor is large student loan debt.

Millennial car buying against many peoples’ assumptions as well. Compared with Generation X at the same age, millennials are actually buying cars at more than a 20% greater amount. The differences are that auto loan terms are generally longer and with more interest paid over the life of the loan. This flies in the face of claim that services like Uber and Lyft are killing the auto industry. For auto loan providers, this is certainly welcome news as well.

What this means for marketers

To successful market credit cards and loans, you must understand the millennial mindset. This is challenging because millennials are the most diverse generation in history.

There are a few things that are true in a broad sense:

  • Millennials have a higher rate of student loan debt than previous generations.
  • Millennials value transparency and ethics in the companies they do business with, and are willing to make choices based on these over many other factors.
  • Millennials are starting families and buying homes later and buying fewer cars than previous generation.s
  • Millennials pay close attention to online reviews and word of mouth.

Despite a reluctance to assume more debt, millennials will need credit as they mature in the workforce, start families, and buy houses, cars, and other commodities which credit enables.

Further, while some traditional demands for credit and loans have decreased for millennial generation, there are other opportunities to assist millennials with their financial needs. This generation places great value on experiences, including travel. For instance, international travel is set to increase by 47% between 2013 and 2020, with a good portion of that market being millennials. Credit card companies that reward customers based on travel and/or offer travel benefits can capitalize on this millennial value.

It’s important that financial institutions demonstrate understanding of what is important to individuals, such as through rewards programs. Transparency about ethics and fees, and openness about online reviews are also key to building trust with millennials. While they may not spend money in the same way as preceding generations, having good credit scores and access to credit is vital for any generation.

Next steps

Download our free guide to reaching and engaging Millennials and Gen Z for financial services marketers.

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Greg Kihlström
Greg Kihlström
SVP Digital