Young adults pay with debit cards and cash over credit cards three-to-one. Are we spending smartly or missing out on valuable perks credit cards offer?

Today’s 20-somethings are three times as likely to make purchases with a debit card or cash than use a credit card.

What do this and other statistics about how millennials and older members of Gen Z use consumer credit say about their approach to personal finance?

Money Under 30 polled 261 22- to 30-year-old Americans in September 2015 about their use of credit cards.

We found that 74 percent of these younger Americans have at least one open credit card; only 13 percent of respondents have four or more open credit cards. The full results are illustrated below:

How 20-somethings use credit cards survey results - MoneyUnder30

I’ve long theorized that millennials who became young adults during the 2008-09 recession naturally became wary of credit. Our data seems to support this.

Despite three quarters of the young adults we polled carrying credit cards in their pockets, most prefer to pay for everyday purchases with a debit card (50 percent) or cash (25 percent). In addition, a majority of those that do not have a credit card (60 percent) cite their desire to be careful with debt – not a lack of credit – as their reason for not having credit cards.

That’s not an unfounded concern.

Although just over half of these young adults (53 percent) report that they always pay their credit card balance in full at the end of the month, that leaves 47 percent who carry a balance – and pay finance charges – at least occasionally.

One in four respondents admitted to paying less than the full balance due every month in the last 12 months. Those cardholders’ average debt was $4,470.

Why do young adults use credit cards?

Overwhelmingly, the biggest reasons these millennials use credit cards are for the rewards (59 percent), for emergencies (55 percent), and for the convenience (50 percent). The other top reasons for using credit cards were: the ability to pay off large purchases over time and to build a good credit history.

When choosing a new credit card, rewards were the single most important feature for these young adults (30 percent), followed by a low APR (26 percent), and no fees (23 percent).

Despite many card issuers promoting new features such as mobile apps and free credit tracking, just 2 percent of respondents cited these features as important when choosing a new card.

Our take

I think the fact that young adults pay with debit cards and cash nearly three times as often as with credit cards shows members of our generation are making efforts to spend within their means and avoid debt. That’s great!

Many young adults, however, may be unaware of other reasons credit cards can be a smarter way to pay than debit cards, such as additional security and buyer-protection features.

Related: The 5 Biggest Debit Card Dangers

Finally, using credit cards responsibly is an essential way to build a strong credit history that’s required for renting apartments, getting car insurance, and getting the best rates on mortgages and other loans.

Young adults who avoid credit cards entirely – as well as those who abuse them – may be making it more difficult to attain future financial milestones, like car or home ownership.

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