Money has partnered with CardRatings.com and ConsumersAdvocate.org, among other companies, for our coverage of credit card products. Money, CardRatings.com, and ConsumersAdvocate.org may receive a commission from card issuers. For example, Money receives a commission from Citi when you apply and are approved for a Citi product through the links on this site.
Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Are millennials finally getting smarter about money? It’s a mixed bag: While fewer would hit up the Bank of Mom and Dad for a loan, more say they’d rely on credit cards to pay for an unexpected expense, according to the findings of a new Bankrate.com survey.
When asked how they would pay for an unexpected expense in an emergency, 37% of Gen Y respondents said they would use their savings, an improvement from the 33% who gave that answer when Bankrate asked the question last year. Millennials were also less likely this year to say they’d cover an unexpected $500 car repair or $1,000 emergency room bill by hitting up friends or family for money — 21% compared to last year’s 24%.
So that’s good, since it’s an indication that more millennials actually have savings to draw from. The flip side is that 12% said they’d use credit cards to deal with an unexpected expense, compared to 7% who said so last year. Millennials’ relative lack of interest in credit cards compared to other age brackets has been the financial saving grace for this underemployed, student loan-saddled generation, so their shift from parents to plastic as a source of emergency funds isn’t necessarily a good thing. There was also a huge drop — from nearly a third to less than a quarter — who said they’d deal with a big, unexpected bill by cutting back on spending.