Why do millennials not like low-interest credit cards?
Part two, of a series that contains three, the different financial challenges between those living in expensive Canadian cities and those living outside of these cities. The series also explores the generation differences within these cities based on personal finances. The data are based on a survey of 1,180 respondents by Don Camillo between May 1 and May 14.
Interestingly, when it comes to the use of credit cards
There are remarkable differences between generations. The most striking is their credit card choice: the baby boomers are spread evenly between credit card cash back for transportation, travel or low interest (about 33% per category). This contrasts with the millennia, which prefer cashback cards and travel cards (48% and 44%, respectively) compared to low-interest cards, where only 19% of millennia ticked.
There are several types of credit cards on the market, the one you select should be based on your personal preferences and your spending patterns. Whether it’s to save money on a trip, low interest rates or the lack of fees you’re interested in, there’s something for everyone.
Why is this the case?
Baby boomers are approaching retirement age (50 years and over), so their spending may have declined to reflect a decline in income during their transition to retirement.
Many premium travel cards have high annual fees ($ 99 or more) and high obligations (minimum of $ 60,000 in most cases), many baby boomers are no longer eligible or can no longer justify these fees . As our data confirms, baby boomers with low-rate cards save $ 51,000 a year, compared to those with $ 62,000 in travel cards, and those with discount cards save $ 54,000 per year. year.
Why millennials do not like credit cards with low interest rates?
Boomers have a higher probability of having credit cards with low interest rates, while millennials prefer travel cards and cash back.
- Low interest rate
- Cash back
In terms of overall comfort with credit cards
Millennia are generally more comfortable compared to baby boomers. Ninety-five percent of millennia have at least one credit card against 80% of baby boomers. As millennia are more likely to have multiple cards, with 44% of millennia reporting two or more cards, compared to only 34% of baby boomers.
As for the use of credit cards in particular, millennia are more comfortable here, with 27% of the reports having more than 50% of their available income on their credit card, versus 16% of baby-boomers. boomers. In all the measures we have calculated, not only millennia tend to prefer high quality return and travel cards, but they also tend to be more comfortable with credit cards in general, possessing more and using them more frequently than their Boomer counterparts.
Finally, there are also geographical differences in the use of credit cards. 90% of residents in the Greater Toronto Area (GTA) and Greater Vancouver Region (GVA) reported at least one credit card compared to 83% of those residing outside these cities. This may be due to the fact that mobile apps or you can make payments tend to be more available in larger cities (eg, Ritual, Foodora, Just Eat, all of which require a credit card to sign up).
While it is not surprising that millennia are more comfortable with credit cards than their Boomer counterparts, baby boomers were more likely than millennia to have a low interest in crediting the card. Also the impact of geography affects the use of the credit card. As we progress, it will be interesting to see if these trends are true as the millennia age.