Millennials Finding Less Taste for Credit Cards
For anyone who remembers 2008, it’s often remembered poorly. That year featured a string of economic disasters to the point where people actually lost houses over some of the problems that came around. The younger millennials who grew up in that time frame, and witnessed these problems first-hand, took one major point with them: avoid the credit card. This development has some significant impact for retailers.
It’s not that millennials are afraid to pull out the plastic, a report from Entrepreneur noted, but rather that millennials prefer plastic backed by cash when it’s brought into play. Millennials increasingly prefer debit cards and prepaid credit cards to actual credit lines that need to be paid off later. Plus, as much as millennials love mobile payment systems, there are also plenty of them out there who stick to cash.
That would be a note of concern for many retailers, except that there are some principles recommended to help take advantage of the millennial resistance to credit cards. Putting a greater emphasis on social connection is one point, along with offering short-term financing. Instead of opening up the door to the traumatic horror of the revolving-balance credit card system, why not just offer a short-term, three-month loan that’s paid off comparatively quickly, with a little shot of interest?
Of course, there’s also the point of engagement: focusing on the mobile connection will pay off in the long run. Don’t just offer a mobile wallet, however; consider providing budget tools and financing options sufficient to pay off goods in the short term, as noted previously. Making a better customer experience can go a long way toward keeping even gunshy millennials buying.
In the end, that’s mostly what it’s all about. Make the best customer experience you can. Millennials love experiences; we saw as much recently with the issue of quick-service restaurants, and how a high-quality experience kept millennial diners coming back. Building trust and offering the tools that millennials want will also be a key point in keeping that business going.
Millennials are responsible for a lot of spending right now, and they’re on track to be one of the biggest-spending generations yet. Understanding what they want will be the ultimate key toward landing a piece of that spending pie.