In our last blog, we highlighted the fact that millennials have proven that they simply love using credit cards to pay for their purchases. Among the top reasons credit cards are popular with younger shoppers are the fact that many offer rewards, provide cash back and allow for flexible payment schedules.
However, some wish to challenge the notion that credit cards are the most popular form of payment-providing pieces of plastic among millennials. On Chimebank.com, Ben Luthi writes that in spite of the perks that credit cards provide cardholders, debit cards seem to be the more popular choice for young shoppers. According to Luthi, a 2015 Chime survey found that 67 percent of millennials prefer debit cards over credit cards.
What would make debit cards favoured over credit cards?
The first thought is that debit cards help to ward off the risk of falling into debt. As you’re aware, credit cards enable their holders to effectively spend money they don’t yet have. Buying something on credit is equivalent to borrowing money. As mentioned earlier, credit cards also allow their users to pay for their purchases over time. With minimum payments accepted by credit card issuers, interest accrues on accounts, making the original purchase much more expensive over time.
Debit cards, on the other hand, insist that their users spend only what they have available in their bank accounts. Essentially, they are as good as cash and work in much the same way. Debit card users can only buy what they can afford, making debit cards the ideal choice for those worried about accruing large debts.
“Millennials grew up in rocky economic times,” explains Luthi, “When the Great Recession began in late 2007, it rocked consumers. According to the Bureau of Labor Statistics, unemployment rates reached 10% in 2009. The number of job openings decreased by 44% during the recession as a whole. The uncertainty that came with the Great Recession put young consumers on notice.”
Debit cards provide millennials with security.
As mentioned, debit cards are connected to bank accounts, insisting that their users not spend more than the balances they have in their accounts. Our younger generation, it seems, is pretty wary of debt. Unlike generations before them, they don’t seem willing to risk falling on hard economic times.
“Knowing that high debt loads can have that kind of impact has turned younger consumers off to borrowing,” writes Luthi, “Rising student debt levels may also contribute to millennials’ aversion to credit. According to Student Loan Hero, 2016 college graduates were shackled with an average of $37,172 in student loans. Indeed, millennials already feel like they’re drowning in debt. They certainly don’t want to add to this burden.”
So, is your business taking advantage of the face that millennials love using debit cards?
For more information about how you can begin to accept debit cards at your place of business, please don\’t hesitate to call Canadian POS Corporation at 1-877-748-2884. You may also email us at info@localhost. Be sure to ask us about our Countertop and Wireless POS terminal options!