- A weekend trip to Las Vegas made me realize how many of my millennial friends are still relying on debit cards for all of their daily purchases.
- Surprisingly, it's not just my friends who aren't taking advantage of credit card rewards - 23% of millennials don't have a credit card.
- And that's problematic: Not only can credit cards help build credit history, but they can also help you take advantage of valuable rewards.
- See Business Insider's picks for the best rewards credit cards »
At a restaurant in Las Vegas, a few friends and I were splitting the check for brunch. When the check came, we all pulled out our cards to pay. I was shocked to see two debit cards among the six of us.
My friends are millennials, and they're generally pretty good with money. They're all frequent travelers, and love to spend money on experiences like dining out. While one of my friends is very loyal to the Capital One Venture card and I'm a United Explorer card fanatic, not everyone has found the right card yet. They're all smart and savvy people, and it surprised me when I saw some of them missing out on all that credit cards have to offer.
Later, I found out that my friend group was pretty representative of the larger population: About 23% of millennials don't carry a credit card, according to TD Bank's Annual Consumer Spending Survey. And that means many millennials are leaving big rewards on the table.
I do need to add, here, that it's responsible credit card use that earns rewards and builds your credit - paying your bill in full and on time. Essentially, it's smart to treat your credit card like a debit card, using it only to spend money you have ... with the potential for much more benefit than an actual debit card.
Airline rewards cards can be a big upgrade for frequent travelers
I'm a big fan of airline reward cards. They've helped make flying more enjoyable, and have helped me take vacations when I couldn't afford to. I really can't imagine ever using my debit card regularly again.
There are a lot of advantages to having an airline credit card, from earning free trips to just having TSA Pre-Check or Global Entry fees covered by your card. Travel is a big priority for many millennials, and it is among my friend group as well. These cards can help make travel incredibly affordable, and increasingly possible.
Other types of rewards, like cash back, can add up
At the very least, a no-annual-fee cash-back card is a good way to get a small return for just pulling a different card out of your wallet. While many airline credit cards have a fee associated with them, many cash back cards don't, like Chase's Freedom and Freedom Unlimited cards.
Cash-back cards can help you get free cash that you wouldn't get through making purchases on a debit card. Unlike airline miles, these rewards can be used for pretty much anything, including knocking down your bill.
Debit cards just don't have much benefit
I can't see the value in ever using a debit card after having my airline credit card for just over a year and a half, and using a cash-back card occasionally as well. It's not necessary to have multiple credit cards to see benefits, either - even just having one can put money in your pocket that a debit card couldn't.
Credit cards can be a tool for building credit and harnessing rewards when used responsibly, and debit cards can't rival that.
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