Collector - December 2017 - 10

FYI

21%

more millennials opened
auto loans compared
to Gen X borrowers
at the same age.

46%

of millennials believe
financial success
means avoiding debt.

64%

of millennials consider credit
cards to be dangerous, but
two out of three have
at least one credit card.

Sources: TransUnion, Experian, Facebook

Demystifying Millennials' Credit Preferences
Are young people lazy with their finances, or just cautious?

D

o millennials really deserve their
bad reputation regarding their
spending habits? These young
adults are often labeled as lazy with their
finances and unable to commit to large
purchases, like a car or house-but at
the same time easily lured by the instant
gratification of smaller purchases they can
post about on social media.
The reality is that 67 million millennials,
currently 23- to 37-years-old, account
for 25 percent of the buying power in the
U.S., according to a recent TransUnion
study. This research takes a closer look into
millennials' credit preferences from last
year and dispels common myths about their
spending habits.
The first credit myth portrays millennials
as lazy with their finances-racking up
large amounts of credit card debt. That's far
from the truth; millennials maintain lower
balances on their credit cards than older
consumers, in part because of their increased
use of debit cards and cash. TransUnion

10

found they are twice as likely to pick debit
cards as their first choice of payment.
Ezra Becker, senior vice president and
head of TransUnion's global research
and consulting group, noted, "Younger
consumers present substantial growth
opportunities for lenders during their
lifecycle, and it's imperative to understand
their credit preferences now to build strong,
long-lasting relationships going forward."
The second myth relates to millennials'
supposed aversion to buying a vehicle or
house. Again, this is inaccurate. Millennials
are opening new auto loans and personal
loans at higher rates than previous
generations. For example, they opened new
auto loans at a 21 percent higher rate than
Generation X consumers.
And a July 2017 TransUnion survey
found that nearly 75 percent of millennials
reported that they plan to buy a home in
the future.  
"Our study clearly shows that
millennials exhibit different preferences

for credit products than Gen X'ers did at
the same age," said Nidhi Verma, coauthor of the study and vice president in
TransUnion's innovative solutions group.
"While credit cards are not as popular with
millennials as they were with previous
generations, purchasing or leasing an auto
is clearly important to them."
Millennials are absolutely a large part
of the consumer market, and in fact have
been the first to embrace and normalize
things like smartphones and digital data
consumption.
"Digitalization allows consumers of
all ages to more easily 'shop around'
for a vehicle, making the process less
onerous," Verma said. "This is the
market millennials have grown up
in, and the one in which they most
naturally operate. In particular, the
influx of FinTechs into the personal loan
space appears to have resonated as an
attractive lending channel for millennials
growing up in the digital age."

ACAINTERNATIONAL.ORG


http://www.ACAINTERNATIONAL.ORG

Table of Contents for the Digital Edition of Collector - December 2017

President’s Page
Industry News
Best Practices
FYI
Collection Tips
Stronger Together
Taking a Layered Approach
Lines of Communication
Calendar
Honor Roll
Collective Intelligence
CFPB Issues Final Rule for Small Dollar Lending Market
Ask the Experts: Training Advice
Court Rules Voicemail is a “Communication" and Disclosing Name of Collection Agency Provides “Meaningful Disclosure” Under FDCPA
Compliance
ACA SearchPoint
Last Word
Collector - December 2017 - Cover1
Collector - December 2017 - Cover2
Collector - December 2017 - 1
Collector - December 2017 - 2
Collector - December 2017 - President’s Page
Collector - December 2017 - Industry News
Collector - December 2017 - 5
Collector - December 2017 - 6
Collector - December 2017 - 7
Collector - December 2017 - Best Practices
Collector - December 2017 - 9
Collector - December 2017 - FYI
Collector - December 2017 - 11
Collector - December 2017 - Collection Tips
Collector - December 2017 - 13
Collector - December 2017 - Stronger Together
Collector - December 2017 - 15
Collector - December 2017 - 16
Collector - December 2017 - 17
Collector - December 2017 - 18
Collector - December 2017 - 19
Collector - December 2017 - Taking a Layered Approach
Collector - December 2017 - 21
Collector - December 2017 - 22
Collector - December 2017 - 23
Collector - December 2017 - 24
Collector - December 2017 - 25
Collector - December 2017 - Lines of Communication
Collector - December 2017 - 27
Collector - December 2017 - 28
Collector - December 2017 - 29
Collector - December 2017 - 30
Collector - December 2017 - 31
Collector - December 2017 - 32
Collector - December 2017 - 33
Collector - December 2017 - Calendar
Collector - December 2017 - Honor Roll
Collector - December 2017 - Collective Intelligence
Collector - December 2017 - 37
Collector - December 2017 - CFPB Issues Final Rule for Small Dollar Lending Market
Collector - December 2017 - 39
Collector - December 2017 - Ask the Experts: Training Advice
Collector - December 2017 - 41
Collector - December 2017 - Court Rules Voicemail is a “Communication" and Disclosing Name of Collection Agency Provides “Meaningful Disclosure” Under FDCPA
Collector - December 2017 - 43
Collector - December 2017 - Compliance
Collector - December 2017 - 45
Collector - December 2017 - ACA SearchPoint
Collector - December 2017 - 47
Collector - December 2017 - Last Word
Collector - December 2017 - Cover3
Collector - December 2017 - Cover4
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