The Millennial Money Habit That Defies Logic

February 11, 2016 Nemes Money

MoreFed Rejects Colorados Attempt to Create Marijuana BankGoldman CEO Lloyd Blankfein Has Highly Curable LymphomaThis Is the Most Valuable Bank In The World

Last month, the Federal Reserve Bank of Philadelphia published a report that looked at millennials money habits, particularly their use of banks and alternative financial systems. While some findings were hardly a surpriseyounger consumers are most likely to use peer-to-peer lending and alternative payment systems like PayPal and Venmothe report found one big head-scratcher of a trend. Millennials, even those earning high incomes, are exceedingly fond of general-purpose reloadable prepaid cards.

The conventional wisdom around these cards is that they are used mostly by low-income and unbanked populations, and people who distrust big banks. But the majority of millennials have access to conventional credit and debit cards; in fact, according to the report, 83% of millennial prepaid card users also have debit cards. And 60% of millennials with money (household incomes of $100,000+) report using prepaid cards. On the face of it, that doesnt make much sense.

Consumer Payments Monitor conducted a survey to dig down a little deeper into why millennials carry these cards. Users most often cited banks dont offer what I need and bank not near home or office as the reason. That still doesnt quite explain the phenomenon, especially when you consider the vast majority of this demographic has a debit card, which functions pretty much the same way, already tucked into their wallet.


Comments are currently closed.