Millennials Attitude Toward Credit Cards Perfect Reason To Play the Points Game

Now just hear me out on this one...it's a bit complicated, but I think by the end it will all come together.

Travel Summary and Points Summary (Though Points Summary had it first!) both tweeted out a really interesting article from the Los Angeles Times last week titled, "What's in millennials' wallets? Fewer Credit Cards." JD previously wrote about the dangers of credit card debt and it's something that we both struggled with in the past.

But the interesting thing I found from the article from the LA Times is it appears that millennials are much more educated about the dangers of credit card debt than previous generations. The reporter interviewed many people who said they feared the fees from credit cards and that they shouldn't purchase things they don't have the money to pay for, thus they reason they shy away from credit cards. They recognize that the goal of the issuers is to get them to carry a balance and not know how much the interest charges will rack up to be.

In the points and miles game we know the main way to take the greatest advantage of the credit card bonuses offered by companies is to hit the minimum spend on the cards you get and no more, unless it is a good card for your everyday use, pay off the card in full to avoid paying interest charges and then lock the card up until the annual fee comes due. This puts in the smallest amount of spending needed to take the highest amount of benefit from the bonuses.

The key to this strategy is using your everyday spending to meet your minimum spend. I personally had to change my stance on credit cards when I came into this hobby. Previously I viewed credit cards as something that you could use to buy something expensive and pay off over time. That earned me some plane tickets home to Seattle during college, but it also took me lots of time to pay that off and I don't even want to know what I paid in interest. When I finally stopped spending on my credit cards and started to pay them down it was so painful. But after that last payment, when I was debt free it felts great. My attitude toward credit cards was that of most millennials' quoted in the piece, they were designed to put me back into debt. But when I started learning about points and miles and the strategy behind the "game" I realized that I could take advantage of the bonuses offered and keep my spending levels that same if I flipped my thinking and viewed my credit card spending as something that is coming straight out of my bank account.

If you think of it like a debit card, instead of a credit card, and that money is coming directly out of your pocket, at least for me, it opens the door of containing your spending and taking full advantage of the points and miles hobby while not putting yourself further into debt.

I'm proud to say that in my time in the points and miles game my credit score has actually increased. When I graduated from college it was in the middle 600s and now it's in the middle 700s! I've taken my utilization of the credit lines I do have down to almost nothing. I take every step I can to think about what I am spending and then pay off that spending every month. 

I say all of this to postulate that the LA Time article fails to recognize the next step in the process. Those millennials, who dream of travel all the time, are the perfect candidates for this travel game. They treat their credit and their spending with care and if taught the mentality behind putting everything on your credit card, but paying it off in full every month to avoid charges, could be great at this game.

But I have to be careful, I don't mean this as a blanket endorsement to say, "All millennials' should churn to their hearts desire" because we simply know that it's not for everyone and that there are people who simply can't flip their thinking to spend this way. But I think the millennials' who can, and already do view, their credit as something valuable to protect could find themselves suddenly traveling to the locations they always dreamed of, while keeping their spending the same.


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