For years, we’ve heard that millennials don’t want credit cards. The truth is, they do, especially once they hit their 30s and become more established. According to a recent Bankrate.com survey, older millennials (ages 30-38) have more credit cards than any other age group. They’re particularly gravitating to travel cards with lucrative sign-up bonuses and experiential perks, such as free access to airport lounges and Global Entry/TSA PreCheck.

Interestingly, younger millennials (ages 23-29) have the fewest credit cards (1.9, on average). This represents an unintended consequence of the CARD Act. Many young adults are having trouble qualifying for their first credit cards because they lack sufficient credit history. It was mostly a good thing that the CARD Act pushed credit card marketers off college campuses and raised the minimum age for cardholders to 21 (with some exceptions). But, many young adults are having trouble entering into the credit system. FICO says 53 million Americans have so little credit information on file that a reliable FICO score cannot be generated.

Here are the average numbers of credit cards held by the various generations:

3.9: Older millennials (ages 30-38)
3.6: Baby Boomers (ages 55-73)
3.5: Gen X (ages 39-54)
3.3: Silent Generation (ages 74+)
1.9: Younger millennials (ages 23-29)

Similar ages, different results

It’s really fascinating that there’s such a massive divide between older and younger millennials, because many of these people are siblings. They’re close in age and raised in similar economic and societal climates, yet their credit behaviors are very different. I do expect younger millennials (and Gen Zers, who are coming up behind them) to sign up for credit cards in much greater quantities in the next few years. Their slow adoption is, I believe, temporary. Once they get more established, I think they’ll join the party.

Older millennials responded overwhelmingly during the Chase Sapphire Reserve launch (August 2016). It was so popular, in fact, that Chase ran out of the metal the card was printed on. Its 100,000-point sign-up bonus (since halved) was worth at least $1,500 in free travel. The Sapphire Reserve ratcheted up an arms race that had competing issuers tripping over each other to attract desirable customers.

Do younger millennials want something different?

Industry insiders say that a significant number of Gen Zers and younger millennials prefer personal loans to credit cards, because they offer a fixed payback period and lower interest rates. This coincides with a trend of rising credit card delinquencies, which is steepest among those in their twenties.

The average credit card rate is a record-high 17.82 percent. It’s incredibly important to pay your card balances ASAP. Even more so for millennials, since they carry whopping student loan debt and have yet to hit their peak-earning years. Younger millennials appear to be even more sensitive to debt and interest rates than other age groups.

Many financial institutions are addressing this from two angles: traditional personal loans and newer alternatives that I would term “personal loan-like.” Examples include Pay It Plan It from American Express, Citi Flex Plans/Citi Flex Loans and My Chase Plans/My Chase Loans. These all tap into a growing desire among borrowers to know exactly how much they owe and exactly how long they have to pay it back – rather than carrying open-ended card balances. The same goes for point-of-sale lenders such as Affirm, Afterpay and Klarna. The added benefit of these is that they can be easier to qualify for than credit cards.

I still think rewards are – and will continue to be – the sexiest credit card feature. For those with debt, though, it’s a totally different story. To paraphrase a Chinese proverb: the best time to pay it off was years ago. The second best time is now.

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Ted Rossman is the industry analyst and columnist at Bankrate.com and CreditCards.com. He has been interviewed by hundreds of media outlets, including the Wall Street Journal, Forbes, NBC Nightly News, CBS News, CNBC and Fox Business. Ted also writes the “Wealth and Wants” column for CreditCards.com, which focuses on cash back cards. He previously spent seven years as a member of the award-winning communications department at CreditCards.com and its sister sites, The Points Guy and Bankrate.