Millennial Credit Card Customers, Part 2: Connecting With a New Breed of Credit User
Credit cards are becoming an increasingly preferred financial tool among today’s young Gen Y consumers, as shown by the number of millennial credit card customers nearly doubling between 2009 and 2013. Part one discussed millennial concerns about credit and how trended data helps target these consumers on their terms. To help you appeal to this demographic, let’s dig deeper into how this generation prefers to use and manage their credit.
What moves Gen Yers to open a credit card account and choose credit over debit? In a word: rewards. As one millennial interviewed by Equifax stated, “Our generation can be bought.” These credit card customers recognize the value of getting cash back, discounts and free airline miles, while others use credit cards as an emergency backup. Some millennials have several credit cards and consider opening new ones based on initial short-term rewards or points, discounts within certain industries and online purchase incentives.
About four out of every ten Gen Yers use credit cards as often as they can to maximize rewards points. They research card offers online, monitor reward points across their cards and allocate card spending based on rewards. This focus on rewards underscores the fact that millennials are using their credit cards as often as possible.
Paper is passé
Generation Y is both technically proficient and environmentally conscientious. They dislike paper statements, preferring to both monitor and manage their accounts online or via mobile apps — including automated payment alerts and digital account statements. In addition to fewer paper statements, they’re also using fewer traditional financial services associated with debit accounts, such as handwritten checks and in-person visits to their financial institution. Some young credit card customers only visit their bank or credit union to make a deposit and only write checks for rent; for everything else, they prefer to use mobile apps or online credit card transactions.
No fees, please
No one likes to pay fees, whether from ATM transactions or monthly interest, but millennials especially try to avoid having to pay them. Aite Group research compiled in the May 2014 report How Millennials Manage Their Data notes that more than four out of every ten young Gen Yers and one-third of old Gen Yers pay less interest on their credit cards because they pay their balances in full each month — something that Gen Xers and baby boomers are less likely to do.
Connecting with millennials is all about understanding what they want — and expect — from financial institutions. In a nutshell, that means more enticing rewards, a reduced reliance on paperwork and ways to avoid imposing fees on these smart, young consumers.
Image source: Big Stock
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