What Millennials Think About Credit Scores and Credit Cards

Millennials are now the largest generation of working-age adults in the country, even though their Boomer and X counterparts still take an occasional jab at how the “internet generation” has always had it so easy or is, perhaps, a little out of touch with finances and career expectations.

A new survey, however, finds that Millennials are fairly well grounded when it comes to their credit, even if they may have some misconceptions and may even be currently living with their parents. In the Capital One Credit Card Confidence survey, for example, more than half of Millennials (54%) admit they would rather be financially independent living at home rather than be financially dependent living alone. To add to the stereotype, nearly 70 percent said they would rather lose five pounds than be approved for their next credit card.

The findings do show some positive signs that Millennials at least understand the basics of good credit:

Hands down, Millennials believe that a good credit history starts with what’s in your wallet: Nearly half (48%) say the most important reason for having a credit card is to establish a good credit rating. In fact, significantly more Millennials chose this option over any other.
Less than a quarter (23%) said having a credit card in case of emergencies was the number one reason to have a credit card, and less than one in ten (8%) said that managing cash flow was the most important reason to have a credit card.
What makes the bottom of the list when it comes to the top reason for having a credit card? It’s the extra perks that are a benefit of having a credit card. Only 6 percent said their top reason for having a credit card was to get rewards and discounts.

Other findings:

When asked which they would have a better chance at, more than a third (37%) say they would have a better chance at being approved for a credit card than hitting the jackpot at a casino, landing their dream job or being related to a celebrity. In fact, significantly more Millennials said they had a better chance of getting a ‘good to go’ from a credit card company than any of the other responses.
Many millennials believe the deck is stacked in their favor when it comes to their job prospects, as almost a third (30%) said they would have a better chance at landing their dream job.
When it comes to playing the odds, only 19% said they had a better chance at hitting the jackpot at a casino. Even fewer (13%) say they would have a better chance of finding out they are related to a celebrity.

While their chances are good for getting credit card approval, Millennials are not looking for just any old card with run of the mill features – they want a card with benefits that help both their bottom line and peace of mind.

Forget the fees and increasing the interest rates: Nearly half of Millennials (47%) say the most important thing when looking at a new credit card is low to no APR, and almost as many (43%) say little to no annual fee is the most important factor when looking at a new credit card.
Millennials want to be sure they can put their cards on lockdown if needed as more than a quarter (27%) say fraud protection is the number one thing to look for in a new credit card.
About 20% say access to mobile and online financial tools and various types of rewards are their top considerations, and only one in ten (10%) say the ability to personalize the card design is an important factor.

When credit cards get introduced to their financial mix, Millennials have to navigate multiple payment options that not only have an impact on their budgets – but on their future credit horizons.

When asked about how they approach paying their monthly bills (including their credit card bill), nearly a third (31%) say they would pay more than the minimum on all their bills. Significantly more Millennials chose this option over any other – demonstrating that many of them may recognize the positive impact paying more than the minimum has on your credit score.
However, more than a third (37%) aren’t doing themselves any financial favors by only making the minimum payment on their credit cards. 22% say they would pay the minimum on their credit card and pay off their other bills. 15% say they would pay only the minimum on all their bills
Few opt to pay their credit card in full, as only 15% say they would chose to pay off their credit cards and make minimum payments on other bills.

Evaluating credit card features and developing strategies for monthly bill payments are steps along a much longer financial journey where Millennials are taking on some of life’s milestones along the way. It’s not always an easy ride – and Millennials will admit some steps are downright scary.

A quarter of Millennials (25%) say building a great credit score would be the scariest milestone to take on at the moment. This prospect is scarier to them than having some of the most important conversations of their lives – including asking for a raise or promotion at work (17%) or talking money with your significant other (12%).
When it comes to Millennial milestones, the thought of an ignition key may cause a chill to run down their spines rather than rev their hearts, as nearly a third (31%) say buying a new car would be the scariest milestone to take on right now.
Relying on their own credit is as scary prospect for some Millennials as more than one in ten (16%) say applying for an apartment without a cosigner is the scariest milestone to take on right now.

While they may seem separate, credit paths and career paths can intersect – and some factors can create potholes along the way that Millennials may not anticipate.

Nearly half of Millennials (47%) say lack of experience or education could stop them from getting their dream job, and more than one in ten (19%) say a lackluster interview could dash their dream job prospects.
While many Millennials cite some of the more obvious reasons that could stop them from getting their dream job, only 22% recognize that having poor credit could put the brakes on landing their ideal position as employers can check your credit as part of the job application process.
More than one in ten (11%) say unflattering posts on social media could stop you from getting the gig you want.

When posed with a choice between adding to their credit history or subtracting from their waistlines, it becomes clear that what Millennials see in the mirror is more important than what they see in their wallets.

The majority of Millennials (70%) say they would rather lose five pounds than be approved for a credit card.