As a parent of two young sons on the brink of starting their tired jobs, I note with interest there is a flurry of excitement surrounding the Chase Sapphire Reserve Card, particularly among millennials. So excited are they over this that the card (a heavier one than most plastic cards as it contains metal) that the cards quickly ran out of stock in branches.
Ordinarily I would not be surprised but we're talking about millennials here, young people who are not prone to write checks or frequent bank branches, much less expressed keenness in a credit card. Beyond the occasional virtual credit card usage, millennials generally do not gravitate towards credit card. So why now?
As a parent, I am concerned when kids and young adults are suddenly interested in credit cards and acquiring debt, especially for a card that demands a fee totalling $450 per year. It is all very well to stick to their virtual card habits, but I am concerned some parties are making this a fad or trend to court millennials.
The Federal Reserve has found that credit card debt among under-35s are at an all time low for 28 years now. Why are we encouraging millennials to spend and to borrow, and worry that they "cannot obtain home mortgage because they have no credit history"?
According to NYTIMES.com: “Without a substantial credit history, it is much harder to take out a home mortgage, for example.”
When they were once content with virtual credit card usage, they are now herded into debt and spending. What millennials need is proper guidance from the right authority.
This is why I would like to call for support towards the American Consumer Council who can guide them with facts about lending and loans and credit card, beyond the occasional virtual credit card habit.
We should guide the next generation into becoming finance savvy and prioritize on important things, such as study loans, instead of acquiring credit cards on a trend or whim.