For decades, the baby boomer generation has led the way in borrowing on all sorts of credit types, particularly credit cards, but now have been overtaken by a younger generation.
Generation X, the general term for the children of baby boomers, recently became the heaviest borrowers of credit card debt, surpassing their parents in the process, according to new data from the Auriemma Consulting Group. Boomers now trail Generation X in categories including credit card use, balance transfer activity, premium card ownership and more.
This is a stark change from trends seen just a few years ago, the report said. And while such a change was always bound to happen, many in the lending industry expected it to do so farther into the future. As a consequence, it may lead credit card lenders to reassess the way they tailor and offer cards to consumers, particularly in light of the significant number of differences between boomers and Gen-Xers. Generation X is considered to be more ethnically diverse and better educated than the boomer generation.
Further, while many of their credit card usage behaviors mirror those of their parents, they are also unique in a number of ways as well, the report said. Some of their habits tend to look more like those of Millennials, who it should be noted are likely to overtake the older generation more quickly than Generation X did to boomers.
“Generation X’s reign at the top is likely to be short-lived, due to nothing other than demographic reality with a much larger generation of Millennials right behind them,” said Dr. Patricia Sahm, the managing director at ACG.
However, it’s likely that Generation X will also lead the way in pushing companies in terms of mobile credit card use and other electronic transfers their parents never had available to them, the report said. Given that they will be the most influential group of consumers during this burgeoning time for the mobile payments industry, their habits will be taken into account more than any other group.
Mobile payments are expected to be the wave of the future in the credit card industry but as it currently stands there is a lot of speculation as to which type of platforms will become the most popular among consumers.
Image: William Hook, via Flickr