Could Millennials Hurt the Growth Potential for Card Issuers like Visa and MasterCard?

A recent survey on found that only one-third of millennials carried a credit card, which could be bad news for credit card issuers like Visa Inc (NYSE:V) and MasterCard Inc (NYSE:MA). The big question for issuers is whether or not this is a growing trend and if it’s likely to have an impact on their long-term growth.

Logic tells me that credit card issuers are in no trouble at all, especially as we continue to see debt levels reaching record highs and interest rates continuing to rise. The problem with any such study is that millennials make up a relatively young age group, and while many may not have credit cards, it could also be because they aren’t able to get them due to their debt levels and with many still being in school and not having stable, long-term employment.

While millennials may claim they prefer cash, the fact of the matter is that it might just be their only option. The facts are what they are, and we know that the cost of living is not going down, and despite wage increases, the situation isn’t going to improve anytime soon.

Student loan debt continues to rise and for those earning low salaries and in the early stages of their careers, credit cards are often necessary in order to help make ends meet. 

Despite the saturation we’ve seen from these two giants, Visa’s sales were up 9% in its most recent quarter while MasterCard’s top line grew by 20%. These companies are still excellent buys today and there’s no danger that their growth will be slowing down anytime soon.