77 per cent of millennials prefer to have all their financial products and credit cards with their main bank. This is not a joke, that data comes from a recent survey from LowestRates.ca. I remember reading the headline last week on Twitter in the morning and I almost choked on my tea.
The millennials I interact with always talk about how things are different and they have more choices compared to their parents, so what gives? The same report found that 50% of millennials don’t know how to compare credit cards. Seriously? If you’re a regular here (or not), you know that I constantly talk about the options available to you including credit cards.
Choosing your credit card
There are dozens of credit cards (maybe in the hundreds?) available in Canada. They’re constantly being advertised everywhere, yet one expert believes that it’s still a lack of information that’s affecting the decisions of millennials.
“We blindly trust the banks and we’re not used to thinking beyond them. With credit card shopping, it comes down to awareness,” says Justin Thouin, CEO, LowestRates.ca. “Millennials may feel they have less money to spend, so a typical rewards card won’t benefit them. But they need to understand that there are other cards that can benefit them now and their banks simply aren’t giving them all the options.”
I totally agree with Justin here. The odds are you got a student credit card with your bank. Now you may have upgraded since then, but does that card still benefit you? Think about it, as your lifestyle changes, your credit requirements change.
The different types of credit cards available include balance transfer, cash back, and travel rewards. Each one has different benefits, so which one you choose should be based on the rewards you prefer as well as your spending habits. Keep in mind that people with multiple credit cards (or with a higher credit limit) tend to spend more, so try your best to spend responsibly.
Shop around for your financial services
Some people may not realize that you can apply for credit cards that aren’t associated with your home bank. What that means is that if you bank with TD, you can still apply for credit cards from Tangerine, PC Financial, BMO, or anyone else. Again, look at all the products available to you and then choose what works for you.
Of course, financial services stretch well beyond just credit cards. There’s no reason why you should stick with the bank you’re currently with. If you’re not happy with the service or tired with the fees, there’s no reason why you shouldn’t shop around. You don’t have to leave your bank completely, maybe signing up with an online bank is a good way to complement your daily banking needs.
The same thing applies to your investments. You don’t need to stick to your bank, you can manage your money on your own, with a robo-advisor, or a financial advisor. As for what you invest in, there are literally thousands of products available, so do your research (even if you have someone else managing your money).
Despite the fact that there’s never been more choice, I get why Millennials are still loyal. Most of their services and, direct deposits, and investments are with their banks; it can be a real pain to make the change. I personally think that’s a ridiculous reason, but I see why people do it.