Credit unions, an alternative to traditional banks, have been growing at a faster rate than other types of financial institutions, and the Millennial generation is a key driver for that growth. In the first quarter of 2016, says TransUnion, credit union membership jumped at triple the rate of other banks and financial companies. And 25% of credit union members were Millennials, defined as those ages 18 to 35. Three years ago, Millennials accounted for only 20% of credit union members.
“Millennials are an important set of borrowers for credit union growth,” said Nidhi Verma, senior director of research and consulting in TransUnion’s financial services business unit. “Credit unions are actively building their millennial membership, and in fact have experienced growth in this segment every quarter since 2010. Millennials are likely candidates for new mortgages and other credit products as they age, offering credit unions a way to further their market share.”
Credit cards are weak area for credit unions
While both banks and credit unions offer their customers credit cards, fewer credit union members have credit cards. Sixty-nine percent of credit union executives said that more than half of their institution’s members didn’t have a credit card with the credit union.
That doesn’t mean, however that they don’t have credit cards at all. TransUnion’s research found that although 44% of credit union members don’t have a credit card through their credit union, they do carry a credit card in their wallet.
Folks can apply for credit cards online, if they don’t wish to get a card through their bank or credit union. Shopping for a credit card online offers the opportunity to find a card that suits you better, such as a travel rewards credit card, a cash back card, or a balance transfer card.
Many Millennials are reluctant to have a credit card because they don’t want to rack up more debt on top of the student loans that the majority of them are already carrying. However, there are many good credit cards that have low APRs, rewards, and other perks like concierge service and purchase protection. Having a credit card is a smart move in terms of improving your credit score, and it’s good to have in case of emergency, as well.
Whether Millennials choose to keep their money in a credit union or a traditional bank, or even if they use a prepaid digital account, they can apply for a credit card online and find the perfect card for their circumstances.
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