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Millennials: Cards first, cash later (or never)

Sienna Kossman

It’s no secret young adults love technology. We’ve grown up surrounded by digital devices and a world of information at our fingertips. And that’s why we love paying with cards over cash, too. For many millennials — myself included — it’s just easier to keep tabs on digital money.

I just wrote a story based on a new CreditCards.com survey that found while most consumers still use cash to pay for small purchases, 64 percent of 18- to 29-year-olds prefer using a debit or credit card for such transactions. Only 19 percent of consumers over the age of 65 said the same, which is quite a difference.

As I listened to sources share their thoughts on how young consumers pay, I reflected on my own purchasing behavior. I’m a 24-year-old millennial who pulls a card out for just about every purchase I make, small or large, because for me it’s the easiest, most logical thing to do. But when it comes to cash, well, it’s more of a hassle to get and keep track of.

When I got my first job in high school, my dad and I opened my first checking account. Because my bank wasn’t exactly close to home, I immediately set up direct deposit with my employer and relied on my debit card almost exclusively while keeping track of my spending in my checkbook, as I’d been taught, until I discovered the wonders of my online banking portal. I soon began just keeping a close eye on my account balance online.

Since then, my wallet has held more cards than cash. I’ve recently started playing the credit card rewards game and make more online purchases than ever before, which definitely requires the use of a card. I’m also favoring credit over debit these days, even for silly little transactions like a $3.83 shipping charge at the post office last week.

If I have to use cash, I actually find myself getting annoyed. Last weekend I had to visit two ATMs (because the first didn’t work) and was grumbling about it the whole time. I felt like I was wasting all this time because I needed $40 to pay someone back who didn’t have a PayPal account. (That might be the most stereotypical “millennial” sentence I’ve ever written.)

Some might argue relying on cards puts me at risk for overspending, losing track of my transactions or even my overall budget. However, I find it’s the opposite. To me, digital numbers are more tangible than physical dollar bills. I check my debit and primary credit accounts at least once a day so I know what I have to spend, and if I forget, I just need a minute or two on my phone to double-check.

Kristen Cabrera, my 27-year-old co-worker, agrees. We’re just used to digital money.

“To me, my money lives in electronic form,” she said. “I get direct deposit, I transfer money to pay bills, and I pay with credit cards for online shopping and then pay the card off with a click of the mouse.”

For Kristen, cash almost feels like “bonus money.” Instead of feeling guilty watching her checking account numbers decrease with each plastic transaction, she feels more “free” when she uses cash. It’s there until it’s gone with no digital trail, which makes it harder to keep track of, in Kristen’s opinion.

“Seeing cash in my wallet is an extra surprise, like, ‘Oh, I forgot I have some cash!’” she said. “Many minor transactions later and POOF, it’s gone, and I’m back to an empty wallet, which doesn’t hold a candle to what empty account feels like.”

Our other millennial co-worker, 26-year-old Jamie Gonzalez, feels almost the exact same way about using cash.

“With cash, especially cash I didn’t withdraw myself, I have no memory of where it went because I simply don’t track it,” she explained. “There have literally been times I thought I lost $20 only to remember three days later that I used it so quickly and with so little thought that I forgot I spent it.”

Using a card to make even the smallest of purchases is just faster, too, Jamie added. You don’t have to deal with change or fishing out bills from a wallet. Fumbling for cash can almost be embarrassing in this digital age.

“When I used a card for the first time on my own, I was so embarrassed for some reason,” she said. “I was probably afraid to mess it up — it was so nerve-wracking! Now, I get a little red-faced if I pull out cash.”

Amen, sister. Young adults don’t want to feel #awkward.

The new CreditCards.com survey found an overall shift toward more card-based small payments this year. I think this trend will continue, especially for millennials, as mobile wallets and other digital payment tools become more popular.

A study conducted by FICO found 18 percent of all consumers are already using or are very likely to use a mobile payment tool in the next year. Young adults in particular, 18- to 34-year-olds in this study, will start reaching for their phone to pay in the next year or so, according to 32 percent of respondents.

I’m hesitant to jump on the mobile payment bandwagon just yet, but I’m a fan of simple payment options. Right now, that means cards, not cash.

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