Millennials and Credit Card Debt [9 Myths That Hold You Back]

Madison Mingus

Last Updated: March 27th, 2023

A recent survey asked millennials how they felt about paying off all their credit card debt this year. The responses indicated a real lack of optimism:

  • 25% felt not at all confident
  • 28% felt slightly confident
  • 20% felt moderately confident
  • 28% felt very confident

Nearly three-fourths of the millennials surveyed did not feel fully confident in their abilities and skills to pay off credit card debt. Are you part of this group too?

Don’t let your stress or lack of understanding push you away from developing great personal finance skills; instead, embrace your misconceptions and learn where to go from here. 

Below is a list of myths that many millennials believe when it comes to handling credit card debt. If any, or all, of these myths have come across your mind, don’t stress — a panel of over 20 financial experts have shared their wisdom to help guide people just like you, a millennial struggling with debt. 

Go on, start clicking through the list of myths; I guarantee you'll walk away feeling a bit more financially confident.

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Myth 1: You shouldn’t save money if you are trying to payoff debt

Many millennials attempt to aggressively pay off all their debts, putting every extra dollar they can afford to credit card debt. What most don’t realize is that paying off debt is a balance of putting money towards credit debt and putting money towards savings. Kudos to paying off your credit card debt, but think about how a lack of savings could cause even greater financial instability.

“Say your apartment floods, you get fired, need surgery, or face car troubles. You may fall back into credit card debt in order to pay for the unexpected emergency. You’re just continuing that cycle of debt when you don’t set aside money for savings, unable to ever truly breathe," warns Gideon Drucker, Certified Financial Planner. 

Solution 1: Saving is empowering — pay yourself

The word saving needs a change of reputation — most associate the word with restrictions. However, many financial experts champion the notion that saving is paying yourself for the future, rather than depriving yourself today. A good savings plan is one that is specific, organized, and trackable:

  • Specific — Choose a specific percentage of your income that you can put towards your savings with every paycheck. It is often recommended that 10 percent of your paycheck should be put towards your savings each month. Budget the rest of your expenses with the remaining 90 percent of your income each month.
  • Organized The Capital One Mind Over Money Study suggests, “Set up goal-directed banking accounts to help you focus on long-term goals. For example, name an account after a big life goal that you want to work towards, such as buying a house. Use this account exclusively for your savings pool.“ 
  • Trackable — Many online tools make it easy to automate and track savings. Automating your savings allows you to auto deposit money from your paycheck into your savings account, meaning you don’t need to worry about it. Apps allow you to track all of your expenses and income, making you accountable to your savings plan.

 It’s never been easier to track where your money goes.

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Myth 2: The “Keeping Up with the Joneses” mindset won’t hurt you

What is a “Keeping Up with the Jonesesmindset anyway? Essentially, it is the idea that you should use people around you as the benchmark for your own material wealth expectations — If the Joneses are buying a boat, then you should too. 

As a millennial myself, I have found this mindset easily amplified through the use of social media, the ultimate comparison platform. It is now easier than ever to see so much of what others have, evoking feelings of material comparison.

“Many millennials fall into this trap, spending money on “Keeping Up with the Joneses” type vacations, meals out more often than they should, etc. Money is so hidden, you only see what people do,” says financial coach Heather Albrecht. This attitude can lead to debt and dissatisfaction in the long run for those who cannot truly afford the luxuries that they are seeking out.

Solution 2: Avoid minimum payments

If you are capable of making more than the minimum payments on your credit card balance each month, do it! Those minimum payments end up costing you more in interest and give you a false sense of wealth. It is dangerous to get into the habit of spending credit that you cannot afford now with the mindset that you will pay it back later.

Accountant Howard Dvorkin reinforces this principle expressing that, “millennials are so unique, even their debt is different. They run up big balances just trying to make ends meet. I’ve never seen a generation that puts so many daily expenses on their plastic. it’s too darn easy to slip into making just the minimum payments.” Avoid the temptation to run up your card with expenses that you cannot afford to pay in full every month. 

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Myth 3: “Don’t sweat the small stuff” — Convenience spending isn’t a big deal

Millennials have been raised in a world of new and enticing ways to spend money. Convenience spending and instant gratification put millennials in a unique position to spend money in a number of different ways — ways foriegn to previous generations.

For example, “Amazon Prime, food delivery apps, Uber, you name it make it super convenient to say yes to immediate wants. Convenience is nice for saving time, but it isn't so friendly when it comes to saving money and avoiding credit debt. Additionally, the inability to say ‘No’ to not just ourselves, but social situations makes it easier to simply say yes to spending” explains finance educator Josh Hastings

Solution 3: Limit convenience spending

You do not need to cut out all convenience expenses, time is precious after all, but consider cutting out a few. Pinpoint which convenience expenses truly help you save time, versus the expenses that stem from laziness or impatience. 

After you have pinpointed which convenience expenses you can live without, “be willing to make those changes to your lifestyle. Use that extra money from your cut down expenses as a way to help repay your debt,” advises Gladice Gong, personal finance blogger. That extra $50 saved from convenience spending each month can now get you one step closer to being debt free. 

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Myth 4: Millennials should know better than to go into debt

About one-fifth of the experts that contributed to this article explicitly expressed the concerning reality that millennials execute minimal personal finances skills. Millennials are blamed for being reckless with money, but everyone seems to agree that the previous generation did little to teach millennials good personal finances skills.

Ken Rupert, author of "Financial Self Defense" explains, “millennials have become conditioned to supplementing their incomes with debt. This, however, is not entirely their fault since the generation before them set the example. Adding to this reality is the lack of financial acumen they have. Rarely in high school or college are they required to take a personal finance class. This lack of financial priority and understanding has led to increased values in consumer debt for millennials.”

In addition, personal finance blogger, Freya Kuka expresses how student debt adds to the issue of credit card debt amongst millennials:

“Salaries have not risen proportionately to student loans and we can not blame the youth for the nature of the economy. By the time they are done with their degrees, they are struggling to pay bills and meet their student loan payments. What is the answer? Credit cards. The evil piece of plastic that actually accounts for 25% of all millennial debt!”

Solution 4: Start with the basics, take on your debt one step at a time

For millennials who feel overwhelmed by credit card debt, here is the first thing that you need to drill into your mind. Tell yourself that while your debt won’t go away overnight, you can be debt free if you work little by little.

This mindset shift is crucial. Believing that financial freedom comes with time and dedicated effort means that you are finally taking an honest, realistic step in the right direction. No quick fix, no loophole, just a determined plan to eliminate debt one step at a time.

Millennial Kalyn Lewis shares her own personal experience and advice:

“Don’t look at the overall debt and allow yourself to get overwhelmed and shy away from getting after it. Instead, look at it month by month and know that this is going to take you a bit of time. Once I got everything in my month-to-month plan, I started to pay off more each month, and the months needed to get debt to zero also became fewer. Rather than having debt paid off by April 2021, we'll now be credit card debt-free by the end of 2020!”

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Myth 5: All credit cards are created equal

This myth is for millennials who are looking to apply for their very first credit card. Be aware that your status as a credit novice makes you a target for credit card companies. 

“College students are often targeted by credit card companies with “easy” money offers, i.e., credit card offers for those with little or no credit. When a college student needs some money, it’s hard to say no to one of those offers. College students may not be shopping around for the best rate making them more willing to take what is in front of them,” explains counselors from GreenPath Financial Wellness.

Solution 5: Counter your credit card mistakes by improving your credit score

If credit card mistakes have been the catalyst for your debt, then it’s time to take your credit score seriously. Your credit score determines your interest rates for loans, credit cards, mortgages, etc. so if you want to pay less, then you’ve got to have a higher credit score.

“Payment history is the most important factor in determining your credit scores so make sure to develop responsible on-time payment habits every month. Late payments can last up to seven years on your credit reports — the last thing you’ll want to carry with you in your financial journey,” advises Nathan Grant of Credit card insider.

For more information on the five main factors that influence credit score, read our article that goes over the in's and out's of credit score.

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Myth 6: Millennials are lazy and irresponsible

Millennials seem to be an easy target for workplace jokes and internet memes. Every generation has its quirks, but the reality is that millennials were born into an era that makes it uniquely easy to fall into debt.

Credit analyst Yvette Glover empathizes with the many millennials that find themselves in a troubling financial situation:

"Millennials get a bad rap for being lazy or overly sensitive, but the reality for a lot of them is very different. Some face surmounting debt because of the high cost of college tuition.

With a housing market that's even more expensive, millennials are paying more in rent while having fewer opportunities to own. Stuck with higher costs and lower-paying jobs than previous generations, a lot of millennials lean on credit cards to fill in the income gap.

These circumstances add an enormous financial burden to a generation that's still just getting started.”

Solution 6: Pay down debt using the Avalanche Method 

Out of the 25 experts that offered up tips for this article, nearly one-fourth of them suggested using the debt Avalanche Method, also known as the snowball method, as a strategy to climb out of debt. Finance expert Nathan Wade of WealthFitMoney gives an overview of how to implement the avalanche method today:

  1. Create a spreadsheet with a list of your debts organized from the smallest balance to the largest balance. 
  2. Focus on clearing your smallest debt first while making minimum payments on the other debts. 
  3. Once you’ve paid off the first debt, allocate the amount you were paying toward the first debt into the second smallest debt on the list. Focus on paying off this second debt.
  4. You then keep “snowballing” your payments until each subsequent debt is finally cleared.

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Myth 7: There is only one way to pay off credit card debt

A very common, and typically ineffective, way to pay off credit card debt is to apply for several credit cards in an effort pay off already existing credit card debt. Financial expert Robert Farrington comments on this strategy, “It’s common for millennials to get into credit card debt due to a lack of experience in [credit cards]. It’s easy to max out one card, then apply for another, max that out, and then apply for another. Eventually, the bill comes due and it can be stressful to make multiple payments.”

The reality is that if you can not afford to pay off your first credit card, what are the odds that you will be able to pay off your new lines of credit as well? 

Solution 7: Consolidate credit card debt with a personal loan

Thousands of people use a personal loan to pay off multiple lines of credit card debt. If you are unfamiliar with what a personal loan is, here are a few benefits:

    • Convenient — You can essentially consolidate any number of credit card debts into one large payment, eliminating the need to pay off several credit cards and instead just making one monthly payment.
    • Affordable — Personal loans are characteristically known to offer lower interest rates than credit cards — especially those with great credit scores. Financial and law expert, Jennifer Jancosek advises, “Those with a high credit score can use a low-interest personal loan to pay off high-interest accounts, saving significant money over the course of debt due to the lower interest rates.”
    • Strict — In order to pay off your personal loan you have to pay a complete monthly payment each month, you cannot only pay a minimum amount like a credit card. This is great because it forces you to pay off your debt, but can be difficult for those who are not able to financially commit to a set payment each month.

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Myth 8: Your credit card company is out to get you

Many bank and credit card companies aim to be transparent and trustworthy, offering free resources such as trained employees, personal finance guides, online courses, etc. to help out new customers like you. 

Don’t be afraid to take advantage of the free resources; it is all at your benefit.

Reading customer reviews is a great way to gauge a company’s dedication to its customers. Do your homework to find the right company with resources that can help you out.

Steer clear of the few companies that do not appear to be as transparent with its customers.  For example, some credit card companies will “pop up on college campuses to nab students right after they graduate [with credit card offers],” warns Brian Hanly, finance educator. 

If you find yourself in a similar situation, disregard the persuasive offers and remember that some banks and credit card companies are truly willing to help you achieve your financial goals.

Solution 8: Ask a favor from your credit card company

Do not let credit card companies intimidate you. Credit card companies, unfortunately, are not always going to proactively go out of their way to save you money. However, you will be surprised how willing credit card companies are to waive fees or lower APR rates if you pick up the phone and talk with one of their representatives.


For example, money hacker Dave Mason says that, “the easiest way to lower your credit card interest is to call the company and ask them for a lower interest rate. A huge percentage of card holders qualify for lower rates, but never think to ask and the card companies have no incentive to lower the rates on their own. In addition, credit card fees are often reversible. If you get charged a fee, just call your credit card company and ask them to remove it as a courtesy. Some card companies have a policy of removing one fee every six months. But again, they won’t do it unless you call and ask.”

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Myth 9: Spend now, go into debt later

With credit card debt averaging around $8,398 per household, it is easy to fall into the trap to spend now and pay off debts later — isn’t that what everyone else is doing?

“Many millennials have fallen in love with the idea of instant gratification. As a millennial myself, I have seen firsthand how easy it is to resort to credit cards to finance extravagant lifestyles — even when the income level can most likely cannot support it. With credit cards, individuals sometimes do things they really can’t afford to do” says James Lambridis, founder and CEO of DebtMD.

Just because the joy of spending may have gotten you into debt before, it doesn't mean your relationship with spending always has to be a love/hate relationship.

Solution 9: Create a budget

Starting a budget may sound overwhelming and restrictive right now, but think about how less overwhelmed and restricted you will feel when you don’t have thousands of dollars in credit card debt.

Freedom Debt Relief suggests to combat impulsive spending habits and debt by “starting with a motivating budget. Before you dive into the numbers, set and write down goals — and do so with your family/spouse as appropriate. Goals may range from taking a vacation to buying a house. Write down the goals, and then proceed to build the budget around those goals. Paying off debt is infinitely more doable when you are trying to achieve goals that matter to you.”

Before you close out of this article, take a proactive step.

Put this new found knowledge into action — make financial goals and formulate a plan that is tailored to your personality. 

If you need a quick recap of the advice given in the article, below list four key takeaways to help you begin your personal finance journey towards zero debt.

Key takeaways

1. Avoid debt if you can  “Realize that we live in an 'instant' society that encourages everyone to spend money now and pay it off later. Instead of procrastinating your credit card payments, pay more than the bare minimum of what you owe that month! It will save you in the long run.” Ethan Taub, CEO of Billry and Creditry. 

2. Think towards the future

“Millennials should begin financial planning with the end in mind — stop living for the moment with your dollars and instead consider the significant wealth that you could build up in your middle aged years. Build up the confidence to start investing, planning for retirement, and paying down debt.” Jeff Mount, President of Real Intelligence LLC

3. Back to basics: “Millennials should start paying off debt by instituting a budget, tracking spending, cutting back wherever necessary, and/or securing additional income opportunities. Paying down debt is not an overnight solution, but staying organized and being smart about spending are great ways millennials can reduce their interest liabilities and regain financial confidence and control.” Brittan Leiser, Founder/CEO of SavviHer

4. Consider professional debt help:

“If you’ve accumulated debt on multiple cards consider a debt consolidation loan to consolidate your various credit debts into one manageable monthly payment with lower interest rates.” Jessica Vomiero, Editor of Lowest Rates.


Don’t hope to get out of debt, prioritize it.

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