Millennials: do you prefer debit to credit? if so, why?

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NYCaviator
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Millennials: do you prefer debit to credit? if so, why?

Post by NYCaviator »

I’ve seen a number of articles stating that millennials and Gen Z’ers vastly prefer debit cards to credit cards. As an older millennial this was really surprising to me. This forum likely skews towards people who use credit cards for rewards/cash back, and not people who will carry balances, etc. but I’m curious if there are any millennials or younger people on here who do in fact prefer debit, and if so, why?
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by steadyosmosis »

NYCaviator wrote: Sun Mar 26, 2023 8:59 pm I’ve seen a number of articles stating that millennials and Gen Z’ers vastly prefer debit cards to credit cards. As an older millennial this was really surprising to me. This forum likely skews towards people who use credit cards for rewards/cash back, and not people who will carry balances, etc. but I’m curious if there are any millennials or younger people on here who do in fact prefer debit, and if so, why?
I am not a millenial, but credit cards have superior consumer protections.
I never use a debit card for purchases.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by rob »

My bank things I have three heads because I insisted they remove the debit facility and give me an ATM only card... Apparently not common. The protection is better on credit card... but even if it were not then your just arguing to get your own money back and dealing with the time gap to resolution instead of a future bill.
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Jags4186
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Jags4186 »

steadyosmosis wrote: Sun Mar 26, 2023 9:01 pm
NYCaviator wrote: Sun Mar 26, 2023 8:59 pm I’ve seen a number of articles stating that millennials and Gen Z’ers vastly prefer debit cards to credit cards. As an older millennial this was really surprising to me. This forum likely skews towards people who use credit cards for rewards/cash back, and not people who will carry balances, etc. but I’m curious if there are any millennials or younger people on here who do in fact prefer debit, and if so, why?
I am not a millenial, but credit cards have superior consumer protections.
I never use a debit card for purchases.
This is really a myth. Debit cards have the same de jure protections as credit cards when run as credit. The difference is practical. When someone does a fraudulent debit purchase you’re at the mercy of dealing with the bank to put the money back while it’s all settled. With a credit card you just don’t pay. And even if the credit card company sides against you, you always have the option to never pay.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by lakpr »

steadyosmosis wrote: Sun Mar 26, 2023 9:01 pm I am not a millenial, but credit cards have superior consumer protections.
I never use a debit card for purchases.
Not a millennial either (I am actually 50+); ditto. With one caveat -- I do use debit card for purchases, sometimes, but whenever I use it, it is always through Apple Pay.
upstate90
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by upstate90 »

Millennial here. Credit Cards all the way for me. Never carry a balance, cash rewards, and special purchase offers from stores and websites are nice.

I've never used a debit card however so I cant compare.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by arcticpineapplecorp. »

Jags4186 wrote: Sun Mar 26, 2023 9:08 pm This is really a myth. Debit cards have the same de jure protections as credit cards when run as credit. The difference is practical. When someone does a fraudulent debit purchase you’re at the mercy of dealing with the bank to put the money back while it’s all settled. With a credit card you just don’t pay. And even if the credit card company sides against you, you always have the option to never pay.
Why You Should Never Use a Debit Card To Pay for Anything
Debit Cards vs. Credit Cards: Consumer Protections

A debit card doesn’t have the same legal protections that a credit card does.

Here’s a look at the basic protections and consequences of what happens in cases of debit card fraud versus credit card fraud, courtesy of the Federal Trade Commission.

Debit Card Fraud:

You’re responsible for a maximum of $50 of unauthorized transactions if you report the card as lost or stolen within two business days.
Didn’t report the fraud within two days? Your maximum burden goes up to $500 if someone uses your physical debit card without your permission — if you report the fraudulent charges within 60 days after your statement is mailed to you.
Didn’t make that 60-day window to report fraud? You face potential unlimited damage if someone uses your ATM or debit card without your permission.

Contrast that with the level of protection you get when you use a credit card.

Credit Card Fraud:

You are not responsible for unauthorized charges under federal law if your credit card number is stolen.
You won’t be held liable for more than $50 in unauthorized charges if your actual card is stolen.

Clearly, you get a lot more leeway when you use a credit card instead of a debit card!

source: https://clark.com/personal-finance-cred ... -card-pay/
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MtnTravel
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by MtnTravel »

Millennial here as well. I’m about 60% credit, 40% debit. The only reason is that I like to see my available cash in real time. I don’t want to have to look at my bank, then look at a credit card, then add up pending credit card charges, then subtract that from my bank balance.

I think the whole “credit cards are safer” is a bit overblown. I only use Apple Pay with my debit card, which is extremely safe. No one ever sees my card or knows my number. At gas stations, restaurants, and online? Always credit. I’ve had a few cc stolen at gas stations and restaurants, and with data breaches, I don’t want my debit number floating around the web.

So overall, I think it’s fair to say both are safe (especially Schwabs debit cards) but it can be more of a hassle to deal with debit fraud than credit.

I’ll end by saying that I think a lot of my generation’s hesitation for using too much credit is an aversion to debt. We grew up in the midst of the 2008 financial crisis, and dealt with student loans, etc. All of that definitely plays a role.
Last edited by MtnTravel on Sun Mar 26, 2023 9:29 pm, edited 1 time in total.
DN28
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by DN28 »

This is surprising to me.

I’m technically a millennial, albeit an older one. I use credit cards for everything, and keep the debit cards in the sock drawer.

I’d be interested to hear from those who prefer debit cards, and why.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by WOMoney »

28 here. Credit cards all the way. Pay my four cards twice a month to keep my utilization reported down.
mega317
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by mega317 »

Do you have any sources? A quick google turns up a bunch of internally inconsistent fluff articles that don’t really say anything and don’t cite sources.
MtnTravel
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by MtnTravel »

mega317 wrote: Sun Mar 26, 2023 9:29 pm Do you have any sources? A quick google turns up a bunch of internally inconsistent fluff articles that don’t really say anything and don’t cite sources.
I had to Google too because I was curious. A few articles cite to a 2018 Visa study. And some other “studies” by the bank rate website and payment processors.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by whodidntante »

Credit cards are helpful if you have the temperament and the income to avoid getting trapped in a revolving debt cycle. Perhaps credit avoidance is due to having student loans and watching their family and friends get smacked around from overextension. It's an overreaction but leans rational. The stats on credit card usage show that many people carry high balances. I guess I'm included in those stats, though, even though my balances are at 0%.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by pseudoiterative »

i don't know if i prefer debit cards to credit cards. i've never felt the need for a credit card, so i've never signed up for one. in all my years of using debit cards, i've had one instance of a fraudulent transaction, where my bank detected it, immediately blocked the transaction, alerted me, and then helped me block the card and get a new one with a new card number. but maybe i've gotten lucky.

i can understand why businesses that sell credit cards might want me to have one, there's a chance i end up accruing a bunch of credit card debt and i end up paying them some steep interest payments for months or years. they also get to charge me a few percent transaction fees on whatever volume of purchases i make through the card, even if i pay everything off (granted, there can be similar fees when using debit cards).

(i'm in my late 30s, & this is based on experience of living in Australia)
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by muffins14 »

NYCaviator wrote: Sun Mar 26, 2023 8:59 pm I’ve seen a number of articles stating that millennials and Gen Z’ers vastly prefer debit cards to credit cards. As an older millennial this was really surprising to me. This forum likely skews towards people who use credit cards for rewards/cash back, and not people who will carry balances, etc. but I’m curious if there are any millennials or younger people on here who do in fact prefer debit, and if so, why?
Credit. It gives me cash back
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Jags4186
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Jags4186 »

arcticpineapplecorp. wrote: Sun Mar 26, 2023 9:22 pm
Jags4186 wrote: Sun Mar 26, 2023 9:08 pm This is really a myth. Debit cards have the same de jure protections as credit cards when run as credit. The difference is practical. When someone does a fraudulent debit purchase you’re at the mercy of dealing with the bank to put the money back while it’s all settled. With a credit card you just don’t pay. And even if the credit card company sides against you, you always have the option to never pay.
Why You Should Never Use a Debit Card To Pay for Anything
Debit Cards vs. Credit Cards: Consumer Protections

A debit card doesn’t have the same legal protections that a credit card does.

Here’s a look at the basic protections and consequences of what happens in cases of debit card fraud versus credit card fraud, courtesy of the Federal Trade Commission.

Debit Card Fraud:

You’re responsible for a maximum of $50 of unauthorized transactions if you report the card as lost or stolen within two business days.
Didn’t report the fraud within two days? Your maximum burden goes up to $500 if someone uses your physical debit card without your permission — if you report the fraudulent charges within 60 days after your statement is mailed to you.
Didn’t make that 60-day window to report fraud? You face potential unlimited damage if someone uses your ATM or debit card without your permission.

Contrast that with the level of protection you get when you use a credit card.

Credit Card Fraud:

You are not responsible for unauthorized charges under federal law if your credit card number is stolen.
You won’t be held liable for more than $50 in unauthorized charges if your actual card is stolen.

Clearly, you get a lot more leeway when you use a credit card instead of a debit card!

source: https://clark.com/personal-finance-cred ... -card-pay/
Sorry, those two situations are not analogous. The debit situation talks about a physical card being stolen. The credit situation talks about the number being stolen.

The reality is debit cards offer zero liability protection, like this:
Zero Liability protection
Your Card comes with Wells Fargo’s Zero Liability protection, which provides you with more coverage than what Regulation E requires for consumer Cards (see “Liability for unauthorized transactions according to Regulation E” above).
With Zero Liability protection, you’ll have no liability for any card transactions that you did not make or authorize, subject to certain conditions and so long as those transactions occurred before the end of the 60-day period described hereafter.
If your Account statement shows Card transactions that you did not make or authorize, tell us at once. If you do not notify us within 60 days after the statement was mailed or was otherwise made available to you, you will be liable for any additional unauthorized Card transactions that occurred after the 60-
day period and before you provided notice to us (if we can
prove we could have stopped those Card transactions had you promptly notified us). This will apply even to unauthorized Card transactions that occur shortly before you notify us. If a good reason (such as a long trip or hospital stay) kept you from telling us, we will extend the time period.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by runswithscissors »

Debit cards are better for those that may not have the best self control with their spending.
Or tend to buy things with money they don't currently have. As this classic SNL clip highlights -

https://youtu.be/R3ZJKN_5M44

But it's also true that all else being equal, those with credit cards spend more money than those with debit cards. Cash back rewards, miles and other credit card perks all reinforce more spending. I wonder how much less money I'd spend if I bought everything with cash (i.e. debit)...
Blue456
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Blue456 »

Geriatric millennial here. Credit cards for reoccurring spending such as utilities, subscriptions, online entertainment. Debit card only for variable spending such as gas, food, restaurants, vacations. I do strongly believe that there is behavioral component that benefits reduction of spending when using debit card or cash instead of credit.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by dcabler »

Got a daughter in college who uses a debit card exclusively. I actually want her to get a credit card (with a low limit) so that she can start to establish credit. Her fear is that she'll forget to pay it and make things worse and prefers the debit card since that can't really happen. The discussion continues.....

cheers
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by AnnetteLouisan »

I’m Generation X but have a lot of traditionally Millennial sensibilities (I was ahead of my time). I have preferred bank debit with a credit feature, although I do have one charge card that I pay in full every month.

My preference for debit (with a credit feature), originally, was my ignorance of the security risks and my thought that it that it eliminates the middleman. It’s the convenience of a credit card for purchases that require it, without the cost, and it’s one less bill to worry about paying timely with a busy schedule and a lot of travel (I started out when paying by checks in the mail was still the principal way to pay bills). I tried 3 other credit cards (one bank card, one major branded card and one store card) but they didn’t meet my needs. Debit (with a credit feature) rewards me for not spending. I can’t afford to pay 18 percent more than the purchase price.

Also I’ve had no need for credit once I started working and paid off my student loans. So other than student loans I’ve probably paid less than $1,000 in interest in my entire life. I try to collect it, not pay it. That makes my life much easier.
Last edited by AnnetteLouisan on Mon Mar 27, 2023 6:41 am, edited 4 times in total.
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AnnetteLouisan
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by AnnetteLouisan »

runswithscissors wrote: Mon Mar 27, 2023 3:15 am Debit cards are better for those that may not have the best self control with their spending.
Or tend to buy things with money they don't currently have. As this classic SNL clip highlights -

https://youtu.be/R3ZJKN_5M44

But it's also true that all else being equal, those with credit cards spend more money than those with debit cards. Cash back rewards, miles and other credit card perks all reinforce more spending. I wonder how much less money I'd spend if I bought everything with cash (i.e. debit)...
My family does this and we spend a lot less than many families do. I spend $38-45k per year and earn $340k.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Bikesy »

I'm an elder millenial and used to be team Credit Card all the way. I was so financially disciplined I knew my spending wasn't impacted by using credit vs. debit + I got 2% cash back. That $300 per year was a key to my wealth building :D . I jest, but in all honesty when I finally took a good look at our budgeting and spending I decided that personally, having a large chunk of money in my checking account that was technically already spent made me feel more flush than I actually was and that was subconsciously making me feel like I could spend more. At the end of the day I felt like this impact was greater than the small amount of credit card awards I was receiving. So we've recently switched to debit only. We have a separate checking account that's automated for all of our recurring expenses and another account for our variable spending. It makes things very simple and I feel its helped us cut expenses to a point that's much greater than any rewards/safety we'd receive from credit. YMMV.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by hudson »

My children are GenX/Millennials. The generations: https://caregiversofamerica.com/2022-ge ... explained/
My boomer wife prefers debit cards; she's been burned because she didn't watch the activity on her card.
I told her that she should switch to credit only; I received the thousand-mile-stare.
With her permission, I turned on text and email notifications; so far, that's helped.

My debit card is locked up; I carry an ATM-only-card. I've also tightened security on my iPhone (which also protects the wallet app and apple pay), and plan to tighten the screws a little more. (OK boomer!)

Malwarebytes recommendations for iPhone security: https://www.malwarebytes.com/blog/news/ ... &bsft_tv=7

Boglehead discussion on the same subject: viewtopic.php?t=399506
Last edited by hudson on Mon Mar 27, 2023 6:27 am, edited 2 times in total.
stoptothink
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by stoptothink »

Older millenial, I'm an active churner of credit cards and have probably used a debit card once or twice in the past 20yrs. I never use a debit by choice.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by dukeblue219 »

stoptothink wrote: Mon Mar 27, 2023 6:17 am Older millenial, I'm an active churner of credit cards and have probably used a debit card once or twice in the past 20yrs. I never use a debit by choice.
Same here. My friends and family in this generation use credit cards same as everyone else.

Might be a demographic thing?
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by AnnetteLouisan »

Question about this thread. Are we talking about bank debit cards with a credit feature, and using the credit feature, or just straight debit using the debit feature only?
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by MrJedi »

Millennials here. Wife and myself are heavy into the credit card game though, we get about 6-8 new ones every year for bonuses.

I do know some millennial friends who don't use credit cards though. I've seen the articles about it and I don't think it's the majority, but those factions do exist. The common link I've seen is that either they themselves went through financial problems or somebody very close like their parents did, and then the credit cards seem to become scary to use for them. The ones I know also tend to like Dave Ramsey.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by muffins14 »

Bikesy wrote: Mon Mar 27, 2023 6:03 am I'm an elder millenial and used to be team Credit Card all the way. I was so financially disciplined I knew my spending wasn't impacted by using credit vs. debit + I got 2% cash back. That $300 per year was a key to my wealth building :D . I jest, but in all honesty when I finally took a good look at our budgeting and spending I decided that personally, having a large chunk of money in my checking account that was technically already spent made me feel more flush than I actually was and that was subconsciously making me feel like I could spend more. At the end of the day I felt like this impact was greater than the small amount of credit card awards I was receiving. So we've recently switched to debit only. We have a separate checking account that's automated for all of our recurring expenses and another account for our variable spending. It makes things very simple and I feel its helped us cut expenses to a point that's much greater than any rewards/safety we'd receive from credit. YMMV.
But you could still spend the same amount on credit and be left with an extra $300. Perhaps you could use a budget app so you have a sense of how much you’ve spent so far, or just check your balance in the same way you must check your debit balance to avoid getting declined
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by muffins14 »

AnnetteLouisan wrote: Mon Mar 27, 2023 5:41 am I’m Generation X but have a lot of traditionally Millennial sensibilities (I was ahead of my time). I have preferred bank debit with a credit feature, although I do have one charge card that I pay in full every month.

My preference for debit (with a credit feature), originally, was my ignorance of the security risks and my thought that it that it eliminates the middleman. It’s the convenience of a credit card for purchases that require it, without the cost, and it’s one less bill to worry about paying timely with a busy schedule and a lot of travel (I started out when paying by checks in the mail was still the principal way to pay bills). I tried 3 other credit cards (one bank card, one major branded card and one store card) but they didn’t meet my needs. Debit (with a credit feature) rewards me for not spending. I can’t afford to pay 18 percent more than the purchase price.

Also I’ve had no need for credit once I started working and paid off my student loans. So other than student loans I’ve probably paid less than $1,000 in interest in my entire life. I try to collect it, not pay it. That makes my life much easier.
What do you mean when you say you pay an extra 18% for credit? When you use a credit card, you do not pay the interest rate unless you do not pay it off at the end of the month, so there is no cost. There is a cost for debit in that you could use a 2% cash back credit card, but most debit cards offer nothing. For your convenience, bill can be auto-payed so you don’t have to take any time at all. At least no more time than you likely already take to make sure you haven’t overdrawn the account attached to your debit card.

One cost that does exist for both debit and credit however is that some businesses now pass on transaction fees to the customer. This amount of about 2-4% is passed on to you whether you use debit cards or credit cards, can could only be avoided with cash. At least this is my experience with a business that I explicitly asked: they get charged by the processor whether it’s debit or credit.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by anon_investor »

For folks who payoff credit cards, I see 0 benefits using a debit card, just a lot of risks. All of my debit cards are always locked via their respective mobile apps.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by muffins14 »

anon_investor wrote: Mon Mar 27, 2023 6:57 am For folks who payoff credit cards, I see 0 benefits using a debit card, just a lot of risks. All of my debit cards are always locked via their respective mobile apps.
Right, even if the protections were equal for reimbursement after fraud, I’d rather not see my actual spending account get zeroed out just before I had to pay rent or a mortgage. At least with credit my cash is unaffected and untouched, whereas the debit card is a direct link to my liquidity. Having debit card fraud would this be more stressful to me
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by anon_investor »

muffins14 wrote: Mon Mar 27, 2023 7:02 am
anon_investor wrote: Mon Mar 27, 2023 6:57 am For folks who payoff credit cards, I see 0 benefits using a debit card, just a lot of risks. All of my debit cards are always locked via their respective mobile apps.
Right, even if the protections were equal for reimbursement after fraud, I’d rather not see my actual spending account get zeroed out just before I had to pay rent or a mortgage. At least with credit my cash is unaffected and untouched, whereas the debit card is a direct link to my liquidity. Having debit card fraud would this be more stressful to me
Add on credit rewards and it becomes an even more lopsided comparison.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Carguy85 »

Millennial here… Started using a credit card again last year after finding out I was paying more for insurance because of a decreased credit score from not borrowing (used debit cards exclusively). I honestly hate it. It reduces friction that much more. I feel the “cash back” rewards insults my intelligence…reminds me of a cheap piece of junk prize you win at an arcade after spending tons on tickets. Im super cheap, my better half though is more like a typical American when it comes to spending. It’s crazy how fast small transactions can really add up and next thing I know a very large portion of our paychecks goes to paying off the balance every few weeks. Along the same lines, I’ve thought a lot about how much less we would spend if everything was bought with cash…or at least in person with a debit card. It’s way too easy to buy stuff these days with online retailers….just trying to figure out the logistics of that and exactly how that would work before I get too “crazy”.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by beezlebub »

As a millennial, I will offer my own anecdotal observations. The majority of millennials I have known use credit cards, but those that use debit cards tend to have a loose understanding of finances and/or trouble with debt.

For example, an ex of mine refused to ever use a credit card because he insisted it was no different than a pay day loan, that I was misled on cash back rewards and I must be paying for it somehow. Her experience was based on her brother's bad experience with a credit card, so she vowed to never touch a credit card. That example may sound extreme, but others that I have known that only use debit had similar beliefs about credit and are usually living paycheck to paycheck with no buffer.

A relative and his wife have a frighteningly shallow knowledge of how finances work and only uses debit cards. They literally get hit with fraudulent charges at least once every 30-60 days, have to have the bank open investigations, re-send cards, the whole nine yards. I've tried to tell them the security benefits of credit cards, but it's like they cannot comprehend it. On the other hand, they are not the best when it comes to debt so using a credit card may not be in their best interest. They have taken some Dave Ramsey courses to help get out of debt, which I think contributed to their aversion to credit cards, but Ramsey's overly conservative teachings might actually be helping them in the end.

Everyone I have known in my professional life uses credit exclusively, and almost all use cash back cards of some kind. One thing I have noticed over time is that a lot of my professional circle does not fully benefit from credit either. I notice there is a vanity aspect of it. For work lunches/dinners, there have been times when almost everyone at the table (except me) pulls out a Platinum AMEX or Chase Sapphire Reserve when the bill comes. The majority of them with cards with $550-600/annual fees do not reap even a fraction of the benefits of those cards outside of the airport lounge once or twice a year, but the cards carry a certain panache no different than driving a luxury car so they think it's worth it.
muffins14
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by muffins14 »

Carguy85 wrote: Mon Mar 27, 2023 7:12 am Millennial here… Started using a credit card again last year after finding out I was paying more for insurance because of a decreased credit score from not borrowing (used debit cards exclusively). I honestly hate it. It reduces friction that much more. I feel the “cash back” rewards insults my intelligence…reminds me of a cheap piece of junk prize you win at an arcade after spending tons on tickets. Im super cheap, my better half though is more like a typical American when it comes to spending. It’s crazy how fast small transactions can really add up and next thing I know a very large portion of our paychecks goes to paying off the balance every few weeks. Along the same lines, I’ve thought a lot about how much less we would spend if everything was bought with cash…or at least in person with a debit card. It’s way too easy to buy stuff these days with online retailers….just trying to figure out the logistics of that and exactly how that would work before I get too “crazy”.
This is clearly not the credit card’s fault. You have to be responsible for your own spending
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Kingghoti
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Kingghoti »

There are so many angles being discussed. Psychology. Rewards. Consumer protection legalities. Those are all valid. But the one incontrovertible difference is what happens with a fraudulent charge or a dispute (such as goods not delivered). I’d rather put the bank’s money at risk and not my checking account balance.

So it turns on one’s risk appetite. Sure fraud is rare. Sure I have enough other funds that my mortgage and other bills won’t go unpaid while I chase recovery of my own money. Sure I’ll probably get the dispute resolved and my own funds restored quickly. Sure I can be mindful of where and when to not use my debit card (gas stations, e. g.)

To use a gambling maxim, I just prefer betting with House money, that is all:-)
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anon_investor
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by anon_investor »

Kingghoti wrote: Mon Mar 27, 2023 7:43 am There are so many angles being discussed. Psychology. Rewards. Consumer protection legalities. Those are all valid. But the one incontrovertible difference is what happens with a fraudulent charge or a dispute (such as goods not delivered). I’d rather put the bank’s money at risk and not my checking account balance.

So it turns on one’s risk appetite. Sure fraud is rare. Sure I have enough other funds that my mortgage and other bills won’t go unpaid while I chase recovery of my own money. Sure I’ll probably get the dispute resolved and my own funds restored quickly. Sure I can be mindful of where and when to not use my debit card (gas stations, e. g.)

To use a gambling maxim, I just prefer betting with House money, that is all:-)
Debit card fraud is on the rise, so not as rare as you think. Supposedly Ally bank got hit really hard last year. Thankfully, I keep my debit cards locked, it blocked a fraudulent charge attempt this year on my BoA debit card. This is for a debit card that never was used or physically left my house even after activation (it sat in a locked safe).
hoofaman
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by hoofaman »

I've read that the vast majority of bank fees are paid by those living pay check to pay check, in such a situation it seems like using a credit card for a 30-60 day buffer would be very beneficial instead of using debit. As debit card fees are fixed, incurring them for small sums would be much worse than simplifying carrying that debt for a period of time

I am sure these people are concerned with over-extending themselves and getting into debt, or they might not have any credit cards due to low credit ratings. For those people who could get credit cards but choose to use debit over credit, why not simply pay off the credit card everyday? Wouldn't that accomplish the same thing?

There are other issues with debit cards too, I am assuming most use them because they have no choice but those who use them by choice I would be curious to know why. They also provide no rewards so your paying 1-2% more for everything, potential of dealing with holds on funds, no ability to do charge backs like a CC, etc, etc...
Tamalak
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Tamalak »

(I'm a millennial) I used to use my debit card because of vague uneasiness about credit, then I got educated. My debit card is sitting in a box at home.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by rich126 »

Not really a millennial thing IMO. There are some people that just aren't good with credit cards and spend too much on them. They do better with debit cards and they see the money removed from their account. Never been an issue for me but I've known people that have had issues with it. Just like some people prefer to do everything in cash and once they are out of cash they know they can't spend more.
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6bquick
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by 6bquick »

Carguy85 wrote: Mon Mar 27, 2023 7:12 am Millennial here… Started using a credit card again last year after finding out I was paying more for insurance because of a decreased credit score from not borrowing (used debit cards exclusively). I honestly hate it. It reduces friction that much more. I feel the “cash back” rewards insults my intelligence…reminds me of a cheap piece of junk prize you win at an arcade after spending tons on tickets. Im super cheap, my better half though is more like a typical American when it comes to spending. It’s crazy how fast small transactions can really add up and next thing I know a very large portion of our paychecks goes to paying off the balance every few weeks. Along the same lines, I’ve thought a lot about how much less we would spend if everything was bought with cash…or at least in person with a debit card. It’s way too easy to buy stuff these days with online retailers….just trying to figure out the logistics of that and exactly how that would work before I get too “crazy”.

Millenial born smack in the middle of the generation... we use credit cards exclusively. other than the debit card for atm cash withdrawals. the protections offered over debit are almost secondary to the cash back.
Re: underlined above... I love the cash back! I realize it's only 2%, but our credit card is almost exclusively used for things I'd HAVE to purchase either way, so it's literally free money. Which goes right into the brokerage account at fidelity.
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arcticpineapplecorp.
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by arcticpineapplecorp. »

Jags4186 wrote: Mon Mar 27, 2023 2:05 am
arcticpineapplecorp. wrote: Sun Mar 26, 2023 9:22 pm
Jags4186 wrote: Sun Mar 26, 2023 9:08 pm This is really a myth. Debit cards have the same de jure protections as credit cards when run as credit. The difference is practical. When someone does a fraudulent debit purchase you’re at the mercy of dealing with the bank to put the money back while it’s all settled. With a credit card you just don’t pay. And even if the credit card company sides against you, you always have the option to never pay.
Why You Should Never Use a Debit Card To Pay for Anything
Debit Cards vs. Credit Cards: Consumer Protections

A debit card doesn’t have the same legal protections that a credit card does.

Here’s a look at the basic protections and consequences of what happens in cases of debit card fraud versus credit card fraud, courtesy of the Federal Trade Commission.

Debit Card Fraud:

You’re responsible for a maximum of $50 of unauthorized transactions if you report the card as lost or stolen within two business days.
Didn’t report the fraud within two days? Your maximum burden goes up to $500 if someone uses your physical debit card without your permission — if you report the fraudulent charges within 60 days after your statement is mailed to you.
Didn’t make that 60-day window to report fraud? You face potential unlimited damage if someone uses your ATM or debit card without your permission.

Contrast that with the level of protection you get when you use a credit card.

Credit Card Fraud:

You are not responsible for unauthorized charges under federal law if your credit card number is stolen.
You won’t be held liable for more than $50 in unauthorized charges if your actual card is stolen.

Clearly, you get a lot more leeway when you use a credit card instead of a debit card!

source: https://clark.com/personal-finance-cred ... -card-pay/
Sorry, those two situations are not analogous. The debit situation talks about a physical card being stolen. The credit situation talks about the number being stolen.

The reality is debit cards offer zero liability protection, like this:
Zero Liability protection
Your Card comes with Wells Fargo’s Zero Liability protection, which provides you with more coverage than what Regulation E requires for consumer Cards (see “Liability for unauthorized transactions according to Regulation E” above).
With Zero Liability protection, you’ll have no liability for any card transactions that you did not make or authorize, subject to certain conditions and so long as those transactions occurred before the end of the 60-day period described hereafter.
If your Account statement shows Card transactions that you did not make or authorize, tell us at once. If you do not notify us within 60 days after the statement was mailed or was otherwise made available to you, you will be liable for any additional unauthorized Card transactions that occurred after the 60-
day period and before you provided notice to us (if we can
prove we could have stopped those Card transactions had you promptly notified us). This will apply even to unauthorized Card transactions that occur shortly before you notify us. If a good reason (such as a long trip or hospital stay) kept you from telling us, we will extend the time period.
sounds like an email into Clark Stinks
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StevieG72
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by StevieG72 »

rob wrote: Sun Mar 26, 2023 9:07 pm My bank things I have three heads because I insisted they remove the debit facility and give me an ATM only card... Apparently not common. The protection is better on credit card... but even if it were not then your just arguing to get your own money back and dealing with the time gap to resolution instead of a future bill.
I go a step further and ask for credit only. No debit or ATM.
Fools think their own way is right, but the wise listen to others.
runninginvestor
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by runninginvestor »

lakpr wrote: Sun Mar 26, 2023 9:10 pm
steadyosmosis wrote: Sun Mar 26, 2023 9:01 pm I am not a millenial, but credit cards have superior consumer protections.
I never use a debit card for purchases.
Not a millennial either (I am actually 50+); ditto. With one caveat -- I do use debit card for purchases, sometimes, but whenever I use it, it is always through Apple Pay.
I'm a millennial, never use a debit card. Almost all transactions are through credit basically for rewards. The only debit like transactions are PayPal and Venmo for places I don't want to give my CC for. But those probably make up less than 1% of all transactions. I wonder if the high debit usage is based off cash app transactions linked to bank accounts. I have noticed I am definitely in the minority of my friend group about my lack of use of Venmo / PayPal / the other apps they use to pay.
Carguy85
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by Carguy85 »

muffins14 wrote: Mon Mar 27, 2023 7:22 am This is clearly not the credit card’s fault. You have to be responsible for your own spending
Exactly. Blaming the credit card would be like blaming a pen for misspelled words.
DVMResident
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by DVMResident »

Older millennial here and I use credit cards.

The biggest reason is fraud protection and the occasional dispute, which seems to warranted once every year or two. I do play a bit of the churn game and the points are a perk (understanding the fees are indirectly baked into prices).

I really don’t see any upside to debited other than maybe behavioral constraints.
oilrig
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by oilrig »

Millennial here. I use credit card for all purchases, I like the points and cash back. I also credit card churn and haven't paid for a flight in 8-9 years!

I only use my debit card to withdraw cash from an ATM, and I dont do that very often.
JackoC
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by JackoC »

I hate the dumb generation names, but my kids are now all in their 30's and all have up to now used debit cards exclusively. It seems to have also been common with their peers. I think mainly for self-discipline, and just built-up habit. Some have mentioned getting credit cards possibly, lately. Credit cards are superior as a rule with very few exceptions IMO if you can rule out one factor: that ability to spend money you don't have may affect your spending in a harmful way. We can rule that out, and we use bank* debit cards (besides as ATM card) for 0% of purchases. Most people can't rule that out. My kids probably could at this point, but it's a real reason IMO one might not encourage young(er than thay are now) adults (on any possibility they might listen to you :happy ) to get CC's.

*we use Target 5% off (at Target) debit card there. I only learned there was a CC version after wife signed up for DC and haven't bothered to switch it. It draws from a secondary checking account with small balance so I don't care about temporary hassle getting the money back if hackers drain it.
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SconnieBro
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by SconnieBro »

NYCaviator wrote: Sun Mar 26, 2023 8:59 pm I’ve seen a number of articles stating that millennials and Gen Z’ers vastly prefer debit cards to credit cards. As an older millennial this was really surprising to me. This forum likely skews towards people who use credit cards for rewards/cash back, and not people who will carry balances, etc. but I’m curious if there are any millennials or younger people on here who do in fact prefer debit, and if so, why?
I’m 36 and don’t know anyone younger than 50 that prefers cash or debit to credit.
JackoC
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Re: Millennials: do you prefer debit to credit? if so, why?

Post by JackoC »

Jags4186 wrote: Sun Mar 26, 2023 9:08 pm
steadyosmosis wrote: Sun Mar 26, 2023 9:01 pm
NYCaviator wrote: Sun Mar 26, 2023 8:59 pm I’ve seen a number of articles stating that millennials and Gen Z’ers vastly prefer debit cards to credit cards. As an older millennial this was really surprising to me. This forum likely skews towards people who use credit cards for rewards/cash back, and not people who will carry balances, etc. but I’m curious if there are any millennials or younger people on here who do in fact prefer debit, and if so, why?
I am not a millenial, but credit cards have superior consumer protections.
I never use a debit card for purchases.
This is really a myth. Debit cards have the same de jure protections as credit cards when run as credit. The difference is practical. When someone does a fraudulent debit purchase you’re at the mercy of dealing with the bank to put the money back while it’s all settled. With a credit card you just don’t pay. And even if the credit card company sides against you, you always have the option to never pay.
I still prefer CC for this reason, though cash back is the predominant reason. But I'll give a cautionary tale where I outsmarted myself between cash back and buyer protection: I sometimes put leftover 5.25% cashback on 'online shopping' ($2500/qtr limit on BOA CCR card, Platinum Honors) on Amazon Gift Card balance at end of quarter. Had enough balance to buy a $500+ winter jacket for a kid. Didn't fit, sent back for exchange. Amazon seller claimed we'd sent a different jacket back than the one they sent us, sent us back the jacket (or a jacket, I wouldn't even know), no exchange, no refund. Bizarre if you know you didn't do that. But guess what? Amazon sided with them. No way would BOA have sided with a merchant in a case like that on direct CC purchase. Lesson is no more big purchases on Amazon GC balances especially with 3rd party sellers, and as little dealing with Amazon at all as possible (though I'm not going to cut off my nose to spite my face, sometimes they are very convenient and/or have good value on smaller things). The jacket fit my son in law so not a total loss.
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