Millennials Turn to Prepaid Cards for Budgeting
Millennials are looking to new ways to keep to their budget and avoid debt. According to a new survey from TD Bank, this generation is more likely to give themselves an allowance or hide cash to avoid overspending. In addition, many Millennials are turning to prepaid cards to keep their finances on track.
One-third (33%) of Millennials surveyed said they had used a reloadable prepaid card in the last three years, compared to 25% of the population as a whole. 60% of Millennials said they would consider using one versus 49% of the overall population.
“Millennials have different financial needs than other consumer bases,” Tami Farrow, head of retail deposit payments at TD Bank, said in a statement. “The younger you are, the more the likelihood that you have emerging financial needs that require a different set of tools.”
For many Millennials, prepaid cards offer a convenient way to set aside money and track their spending. The survey showed 56% of Millennials found the ability to track spending is one of the main benefits of reloadable cards. By comparison, only 46% of people in all age groups felt this way.
In essence, Millennials have taken the idea of putting cash into envelopes and modernized the practice with reloadable prepaid cards. Yes, there can be some high fees with prepaid cards, but there is also a detailed listing of where the money is going. The newest generation of adults appears to be embracing this opportunity in full force.