Now, millennials who are looking to pay without cash have got even more options. Words were spread about the upcoming credit card from Apple and Goldman Sachs. The card will be branded by Apple Pay –Apple’s very own payment and digital wallet service, in collaboration with Goldman Sachs.
Although not much details are available about the credit card but it clearly indicates the big opportunity the market holds in the credit cards arena.
Yes, there are worries about the rising cost of rewards, but banks yet make a ton of money from credit cards, and Goldman Sachs wants to get its share.
But for Apple it is just another way to get customers on board with the brand. It wants to create long term rapport with millennials.
Similar is the case with Ikea Visa.
Sweden based home furnishing company, Ikea, has recently introduced a credit card which offers 5 percent back in rewards on all Ikea purchases, as well as kitchen installation and TaskRabbit At-Home Assembly services; 3 percent back on dining, grocery and utility purchases and 1 percent back on any other purchase made using this card.
Also, you can avail $25 off on the first purchase and free shipping on in-store Ikea purchases through August.
There is no annual fee on the card but the interest rate is 21.99 percent per annum across the board.
Another team in the league is the Uber Visa.
It was launched in last fall and it comes with perks such as 4 percent cashback on restaurants, takeout and bars; 3 percent cashback on airfares and hotels, Airbnb too; 2 percent back on all online transactions and 1 percent back on any other type of purchase.
There is no annual fee and no foreign transaction fees, also cardholders get a $100 bonus if they spend $500 within the first 90 days.
But here is the con, annual interest rate is on the high side –it ranges from 16.5 percent to 25 percent.
From the viewpoint of lenders, millennials have massive potential as consumers –they have surpassed baby boomers as the nation’s largest living generation.
Young generation has started to expend more than other generations on everyday purchases like groceries and gas, and on experiences such as dining out.
To entice these spenders, card issuers have lifted the game with better rewards and sign-up bonuses. Also, it is working like a charm.
The Chase Sapphire Reserve card initially offered $1,500 sign-up bonus to customers who spent $4,000 in the first three months. The card became so popular among millennials that the bank made profit of some $200 million.
Previous year, more than a quarter of all credit card origination came from consumers aged from 18 to 34.
However, consumers should notice that these enticing rewards come with higher-than-average interest rates that may compensate for the additional perks.