Loyalty to banks is quite high among millennials, who say they are most likely to conduct much of their business with one main bank compared with other generations, according to the results of a new survey from LowestRates.ca released on Thursday.
Specifically, the survey found that 77% of millennials polled say they would prefer to house all of their financial products and credit cards under one bank compared with 60% of Gen-Xers and 55% of baby boomers.
“We blindly trust the banks and we’re not used to thinking beyond them. With credit card shopping, it comes down to awareness,” says Justin Thouin, CEO of LowestRates.ca, in a statement. “[Millennials] need to understand that there are other cards that can benefit them now — like low interest balance transfer — and their banks simply aren’t giving them all the options.”
Although most Canadians (91%) indicated how important it is to shop around before settling on the right credit card, just half know of a reliable resource that gives a comparative breakdown of their options across various banks.
The survey, which seeks to measure consumers’ attitudes and approaches to selecting a credit card, also finds that more than half (54%) turn to online resources to run a tally of their options. In addition, about 20% seek the opinion of family or friends, 15% rely on the word of their bank, 14% consult another bank and 13% take a different course.
Although millennials pride themselves in being the “ultimate Internet researchers” for bargain hunting, the report notes, convenience may pose a big factor in discouraging them from scattering their business across other financial services institutions.
“It’s very easy to pay your credit card bill within one platform and keep track of pending changes,” says Jessica Moorhouse, CEO of JessicaMoorehouse.com, in the report. “It’s nice to keep things simple, even if it means you may not have the best credit card for your needs.”
A lack of awareness, the report cites, also prevents millennials from seeking out better alternatives that suit their financial circumstances. With little money to spare, Thouin adds, it seems that millennials assume that their choices are quite limited — so they don’t bother to check in with other banks and opt to remain with their existing bank.
For example, he adds, millennials may not realize the advantage of having a card that allows for a balance transfer.
Most Canadians surveyed indicated that a card that offers low interest rate on balances and low annual fees topped — 58% for both choices — their list of considerations when shopping for a credit card. Another key finding from the survey suggests that only 15% feel travel rewards matter.
The results are based on an online survey of 1,001 Canadians, which was carried out by Ipsos Reid on behalf of LowestRates.ca and conducted from Feb. 14-15.