Three Myths about Gen Y (From a Gen Y-er)

by. Melanie Friedrichs

Working at Andera, I hear a lot advice for marketing banks and credit unions to Gen Y. Most of it is genuinely good advice, but, as a Gen-Yer fresh out of college, some of it just leaves me shaking my head. Here are three “myths” that I see often.

Traditional Banking Isn’t “Cool”

Yes, there are some things that my generation avoids purely for fear of social stigma. Sweatpants with elastic bottoms are a good example, unless, maybe, you bought them from a thrift shop. But that list is very short; we make the overwhelming majority of our decisions by weighing the costs and benefits like everyone else.

However, the costs and benefits we face may be different, and our understanding of those costs and benefits may be different as well. For example, we don’t use credit cards as often as our parents for two reasons: one rational and one informational. First, rewards may not be worth the hassle of applying and remembering to pay the bill at the end of the month, especially because we spend less and only qualify for low-reward starter cards.

Second, many of us don’t understand the exact mechanics, risks, and rewards of a credit card, and find it easy to continue with what we’re comfortable with—debit cards and cash. I think (although don’t know, because I wasn’t alive and Wikipedia is unhelpful) that this information discrepancy may have a historical basis; when our parents came of age, credit cards (or charge cards) were the norm and debit cards were nonexistent, but today debit cards are the default payment option for many of us and credit cards are an optional add-on. These types of issues also apply to other financial products and services, including CDs, auto loans, mortgages, PFM, etc.

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