Legal restrictions and stricter credit standards prevented millennials from accessing credit cards as often as previous generations.

Happy friends enjoying breakfast at restaurant outdoor patio

Millennials would rather swipe right than swipe plastic. They love to pay their brunch tabs with cash. Debt scares them so much they don’t care about credit card rewards.

The generation born 1981-1996 is accused of many things, but their dislike of credit cards is blown out of proportion. A Google search for “why millennials don’t like credit cards” returns nearly 5 million results. But is it fair to say they don’t like something they couldn’t get?

Some outside factors meant millennials didn’t have access to credit the way previous generations did. Here’s the reality, along with tips to manage credit well at any age.

No income, no co-signer, no credit

Millennials had a slower entry to credit than their Generation X counterparts in part because of a 2009 law, says Paul Siegfried, senior vice president at credit bureau TransUnion.

The Credit Card Accountability Responsibility and Disclosure Act limited the proliferation of credit card offers that left many younger borrowers — especially college students — in debt. It’s had an outsize role in access to credit for younger Americans.

Under the law, issuers cannot offer credit cards to anyone younger than 21 unless they have a qualified co-signer or proof of income. The law also restricts how issuers can market on college campuses: no more free pizza or T-shirts as enticements to open a credit account.

The total number of new college credit card accounts opened fell 17% in the year after the law went into effect, according to Federal Reserve data.

Making things more difficult, the financial crisis that began in late 2007 led banks to close their coffers to all but consumers with the best credit. “In 2009 and 2010, you had lenders that were reducing credit lines and granting fewer loans, including credit cards,” Siegfried says.

This intensified the catch-22 situation for young adults: No one will give you credit because your score is too low; and your score is low because no one will give you credit. Eager to establish their financial lives, tech-savvy millennials helped fuel the rise of other products, like online personal loans.

Millennials opened more than twice as many personal loans as Generation X did at the same age, according to a 2017 TransUnion study. Fintech companies, which offer online financial products, grew from 2% of the personal loan market in 2009 to 24% in 2016.

How millennials use credit cards

The financial crisis, along with crushing student loan balances, did leave some millennials wary of debt. But as lenders started loosening up criteria, millennials responded, Siegfried says. The number of new credit card accounts opened by millennials jumped from 5.5 million in the first half of 2013 to 9.3 million in the same period this year, TransUnion says.

When they finally get that elusive piece of plastic, millennials in general use it as frequently as previous generations, according to a survey by Aite Group, a financial services industry research company. Forty-six percent of millennials surveyed say they use their card at least once a week, versus 52% of Gen Xers and 48% of baby boomers.

The difference is that millennials tend to carry fewer cards and put more research into choosing one, says Kevin Morrison, a senior analyst and author of the report.

How to manage your credit at any age

Millennial or not, here’s how to make the best use of your cards to build your credit:

Pay your bill on time. This is the single biggest factor influencing your credit score.

Pay the balance in full each month, if possible. Some people believe carrying a balance helps your credit score. It doesn’t — it just accrues interest. If you can’t pay in full, try paying more than the minimum.

Keep your balances below 30% of your limit.  This applies to the balance on individual cards and the total across all your cards. Not using all of your available credit is good for your score, and the lower the better.