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Millennials aren't utilizing CC

Regular Contributor

Re: Millennials aren't utilizing CC


@Schwartzinatorwrote:
I haven’t used a debit card in 3 years, and I can count the number of times I’ve paid with cash in that same period on one hand. However, I am more than likely an outlier. Having said that, the majority of my friends on campus do carry a credit card though I don’t know how many are in their name.

Profound...and yet, wait till the student loans mature and the payments become due. 

Message 21 of 34
Frequent Contributor

Re: Millennials aren't utilizing CC

I'm a millennial although I didn't really know until recently. I'm in my early 30's and I use credit cards. I didn't really start using them for rewards until the past year or so and I plan to keep pumping every single purchase I make through them in order to get a few free utility bills, shopping trips and gas station stops. People I work with look at me like I have 2 heads when I tell them you can make over a thousand dollars and maybe $1500 a year just paying normal bills, shopping trips and fuel stops with credit cards.

 

I will say that I did not start doing this until I was comfortable financially with my mortgage, had 2 nice auto finance accounts and was able to afford my monthly payments for my 80K in student loans. We're very blessed and I look at some of the people I went to school with or people close to my age and that's not the case. My wife wants to stay home and get her second bachelors until she is comfortable leaving the kids and it works out for us.  

 

Its when you start letting those $50+ interest hits start hitting monthly that you begin to bleed money. I let a $2500 balance ride on a cap one card recently and the interest was crazy. 

 

We're looking forward to when my DW goes back to work because our student loans could be gone in 5 years and then we could really open up our credit without those borrowing restrictions. 


Starting Score-(01/2017): FICO ||EX:575--EQ:549--TU:588||
Current Score--(04/2018): FICO ||EX:686--EQ:697--TU:715||




Message 22 of 34
Valued Contributor

Re: Millennials aren't utilizing CC

I'm not even a millennial, I'm generation Z. Look at my siggy. I like getting 1.5-2-3-4 or 5% back on what I buy, and get the extra protections not only on the transaction but also extended warranties and whatnot. The number of times I've used cash in the last year (when I had the option of using a card)? One. Have I spent a single penny on plastic that I wouldn't have spent using cash? Nope. Have I ever paid a penny of interest? Nope.

 

Most of my peers are all debit though, and most carry $20 tops on them in cash. Instead of tracking their finances on their own, they'd rather not even have any chance at all that they could spend more than they have. One person I know said they would rather get the charge declined, say "Oh, ****", and walk out of the store.

 

I think it's a lack of personal responsibility overall. This is manifested through numerous channels (Many political and therefore off-topic here), but I think this helps explain how people of my generation manage their finances. Why should I be responsible for paying my credit card and make sure I can pay back what I spend when I can just let them do that for me?

 

I'd also like to make a bit of a tangent about the concept of ownership. One other post on this thread mentioned that millennials are less likely to own a house. First people rented houses. Then people leased cars (Still a relatively new concept). Now people are renting the phone in their pocket. Entertainment as well: Spotify and Netflix have huge customer bases while Mp3 and CD sales are on the decline... (Source: http://www.businessinsider.com/music-streaming-sales-nielsen-spotify-vs-itunes-chart-2017-1) I listen to a lot of music, but despite the initial outlay for CD's, I know I can listen to the music for the rest of my life (or at least as long as CD players exist) without issues. That independant band that broke up and their music disappeared from Spotify, Amazon Mp3, iTunes, etc.? I still got it baby! Smiley Very Happy


TU FICO 8: 750 (5/18) — Ex FICO 8: 751 (6/18)
Message 23 of 34
Established Contributor

Re: Millennials aren't utilizing CC


@GrasshopperStudentwrote:

I'm not even a millennial, I'm generation Z. Look at my siggy. I like getting 1.5-2-3-4 or 5% back on what I buy, and get the extra protections not only on the transaction but also extended warranties and whatnot. The number of times I've used cash in the last year (when I had the option of using a card)? One. Have I spent a single penny on plastic that I wouldn't have spent using cash? Nope. Have I ever paid a penny of interest? Nope.

 

Most of my peers are all debit though, and most carry $20 tops on them in cash. Instead of tracking their finances on their own, they'd rather not even have any chance at all that they could spend more than they have. One person I know said they would rather get the charge declined, say "Oh, ****", and walk out of the store.

 

I think it's a lack of personal responsibility overall. This is manifested through numerous channels (Many political and therefore off-topic here), but I think this helps explain how people of my generation manage their finances. Why should I be responsible for paying my credit card and make sure I can pay back what I spend when I can just let them do that for me?

 

I'd also like to make a bit of a tangent about the concept of ownership. One other post on this thread mentioned that millennials are less likely to own a house. First people rented houses. Then people leased cars (Still a relatively new concept). Now people are renting the phone in their pocket. Entertainment as well: Spotify and Netflix have huge customer bases while Mp3 and CD sales are on the decline... (Source: http://www.businessinsider.com/music-streaming-sales-nielsen-spotify-vs-itunes-chart-2017-1) I listen to a lot of music, but despite the initial outlay for CD's, I know I can listen to the music for the rest of my life (or at least as long as CD players exist) without issues. That independant band that broke up and their music disappeared from Spotify, Amazon Mp3, iTunes, etc.? I still got it baby! Smiley Very Happy


Bingo!!!

 

Also I saw this video on my FB page the other day, and even as a millennial (I turn 30 in 2 months), I have to say I disagree with the salient points. Won't go too off-topic here, but let's just say it's ironic they don't realize that thinking you deserve a well-paying job just because you have a college degree is pure entitlement.  And on that note, as much as I'm not a fan of Dave Ramsey, I have to say he hit the nail right on the freaking head when it comes to college: https://www.youtube.com/watch?v=kmZmwmDUacU

 

(disclaimer: I admit to being very biased since I have an MS in a STEM field, and I absolutely busted my ass in both college and grad school to get to where I am today. Therefore I have 0 sympathy for those who coasted through college, got a useless degree in 15th century German poetry, and is now 6 figures in debt with a minimum wage job)

 



As of 6/21/18:

Message 24 of 34
Frequent Contributor

Re: Millennials aren't utilizing CC


@GrasshopperStudentwrote:

Most of my peers are all debit though, and most carry $20 tops on them in cash. Instead of tracking their finances on their own, they'd rather not even have any chance at all that they could spend more than they have. One person I know said they would rather get the charge declined, say "Oh, ****", and walk out of the store.

 

I think it's a lack of personal responsibility overall. This is manifested through numerous channels (Many political and therefore off-topic here), but I think this helps explain how people of my generation manage their finances. Why should I be responsible for paying my credit card and make sure I can pay back what I spend when I can just let them do that for me?


I would actually disagree and say the opposite. To me, they are trying to manage their finances the best way they know how - by not spending more than they have available. One mechanism to do that is that when they accidentally overspend, they'd rather have an embarrassing moment in front of a bunch of people in public, than pay a fee to their bank in private. (Which one is worse is going to come down to personal preference)

 

Personally, I'd rather track my finances separately, and do, but not everybody can/does for a variety of reasons - some legitimate, some admittedly not. But my point being that they ARE taking responsibility, just doing it in a very blunt fashion manner - perhaps becoming of someone in a situation where they don't have the education in financial topics, or they don't have a smartphone (I work with multiple people who don't have them), or work multiple jobs (or second-shift with kids) and don't have the time to keep up with - &c. Again, some people, yes, have dumb (or no) reasons for doing it that way, but in my view there are plenty of good ones too.

Ch7 discharged 10/2017. Pre-file FICOs high 400s.
04/2018 EX 644; EQ 670; TU 648
Message 25 of 34
Valued Contributor

Re: Millennials aren't utilizing CC


@arkanearkane wrote:

@GrasshopperStudent

Bingo!!!

 

Also I saw this video on my FB page the other day, and even as a millennial (I turn 30 in 2 months), I have to say I disagree with the salient points. Won't go too off-topic here, but let's just say it's ironic they don't realize that thinking you deserve a well-paying job just because you have a college degree is pure entitlement.  And on that note, as much as I'm not a fan of Dave Ramsey, I have to say he hit the nail right on the freaking head when it comes to college: https://www.youtube.com/watch?v=kmZmwmDUacU

 


I'm hesitant to label it entitlement. I don't think it correalates strongly with those refusing to use plastic. I've seen entitled attitudes range from getting as much credit as possible in order to keep up with their peers and going bankrupt by 22 all the way to mere whining that they don't have things, but not going into debt to get them. In regards to the Dave Ramsey video, the person doubled their student debt rather than beginning to pay it off; it's not (hopefully) a representative example.


TU FICO 8: 750 (5/18) — Ex FICO 8: 751 (6/18)
Message 26 of 34
Valued Contributor

Re: Millennials aren't utilizing CC


@capabkcapabk wrote:

@GrasshopperStudentGrasshopperStudent wrote:

Most of my peers are all debit though, and most carry $20 tops on them in cash. Instead of tracking their finances on their own, they'd rather not even have any chance at all that they could spend more than they have. One person I know said they would rather get the charge declined, say "Oh, ****", and walk out of the store.

 

I think it's a lack of personal responsibility overall. This is manifested through numerous channels (Many political and therefore off-topic here), but I think this helps explain how people of my generation manage their finances. Why should I be responsible for paying my credit card and make sure I can pay back what I spend when I can just let them do that for me?


I would actually disagree and say the opposite. To me, they are trying to manage their finances the best way they know how - by not spending more than they have available. One mechanism to do that is that when they accidentally overspend, they'd rather have an embarrassing moment in front of a bunch of people in public, than pay a fee to their bank in private. (Which one is worse is going to come down to personal preference)

 

Personally, I'd rather track my finances separately, and do, but not everybody can/does for a variety of reasons - some legitimate, some admittedly not. But my point being that they ARE taking responsibility, just doing it in a very blunt fashion manner - perhaps becoming of someone in a situation where they don't have the education in financial topics, or they don't have a smartphone (I work with multiple people who don't have them), or work multiple jobs (or second-shift with kids) and don't have the time to keep up with - &c. Again, some people, yes, have dumb (or no) reasons for doing it that way, but in my view there are plenty of good ones too.


But I do think it's foolish to forego such protections and rewards for using cards when they cost literally nothing when used with the same buying power as a debit card. If your definition of overspending isn't until your checking account would be in red, then you likely have other deeper financial problems. Students alone pay almost $1B overdraft fees annually (https://nypost.com/2017/06/06/heres-just-how-much-college-students-are-paying-in-overdraft-fees/).

 

The people I've known in real life do have an understanding of finances (Though often of the Dave Ramsey variety) and do have a smartphone (Though I personally do not trust keeping any financial records on my phone). Anybody should know "I have ~$x in my checking account" and decide if something is worth their money at the time or not.


TU FICO 8: 750 (5/18) — Ex FICO 8: 751 (6/18)
Message 27 of 34
Regular Contributor

Re: Millennials aren't utilizing CC

@capabk wrote:

 

One mechanism to do that is that when they ACCIDENTALLY OVERSPEND, they'd rather have an embarrassing moment in front of a bunch of people in public, than pay a fee to their bank in private. (Which one is worse is going to come down to personal preference)

Accidentally overspending doesn't equate to personal/financial responsibility.

   EQ=810       TU=806       EX=802    INQ=1/3/4   UTIL~1%    AAoA=4yr      AZEO         2.5% VA
Message 28 of 34
Established Member

Re: Millennials aren't utilizing CC

you make a very good point, classes should be taught at high school or sooner, and if you dont learn from your parents ,you dig a hole for yourself that takes many years to recover from.

Message 29 of 34
Established Contributor

Re: Millennials aren't utilizing CC


@capabkwrote:

@GrasshopperStudentwrote:

Most of my peers are all debit though, and most carry $20 tops on them in cash. Instead of tracking their finances on their own, they'd rather not even have any chance at all that they could spend more than they have. One person I know said they would rather get the charge declined, say "Oh, ****", and walk out of the store.

 

I think it's a lack of personal responsibility overall. This is manifested through numerous channels (Many political and therefore off-topic here), but I think this helps explain how people of my generation manage their finances. Why should I be responsible for paying my credit card and make sure I can pay back what I spend when I can just let them do that for me?


I would actually disagree and say the opposite. To me, they are trying to manage their finances the best way they know how - by not spending more than they have available. One mechanism to do that is that when they accidentally overspend, they'd rather have an embarrassing moment in front of a bunch of people in public, than pay a fee to their bank in private. (Which one is worse is going to come down to personal preference)

 

Personally, I'd rather track my finances separately, and do, but not everybody can/does for a variety of reasons - some legitimate, some admittedly not. But my point being that they ARE taking responsibility, just doing it in a very blunt fashion manner - perhaps becoming of someone in a situation where they don't have the education in financial topics, or they don't have a smartphone (I work with multiple people who don't have them), or work multiple jobs (or second-shift with kids) and don't have the time to keep up with - &c. Again, some people, yes, have dumb (or no) reasons for doing it that way, but in my view there are plenty of good ones too.


To the bold part, I think you're confusing being lazy with responsible. The proper way to not overspend is to keep track of your personal budget, not rely on a fail-safe mechanism (overdraft) that's really more designed to protect the banks than you. You can't manage finances passively and claim to be responsible, that's just not how it works.

 

You also don't need a smartphone to keep track of your budget. Save all your receipts, log them into a spreadsheet/journal/whatever recording medium of your liking at the end of the day, then rinse and repeat daily.This is why I always say "yes" whenever I'm asked if I want a receipt, and I ask for one if the merchant doesn't proactively offer me one. I didn't have a smartphone until 9 months ago, but that never stopped me from staying on top of my budget.



As of 6/21/18:

Message 30 of 34