Guest Post: How Do People Value Amazon Prime in 2017?

How Do People Value Amazon Prime in 2017?

By Mike Brown

Read original article here.

Founded in 1994 as an online bookstore, Amazon has not only completely changed the way in which we shop, it has flipped the global economy on its head.

Amazon's arsenal of products first grew from just books when it began to offer CDs and DVDs. Since then, let's just say Amazon has made it almost pointless to shop anywhere else in 2017.

Engagement ring for your loved one? Check. New Refrigerator and some produce to fill it up? Check and check. What about some new tires for your '76 Mustang project? Don't worry, Amazon has you covered.

At the time of the writing of this article, Amazon was trading at $989.32 per share. Amazon is the fourth most valuable public company in the entire world, trailing behemoths like Apple and Alphabet (Google). It is the largest Internet company by revenue in the world and the eighth largest employer in the U.S. In 2015, Amazon leaped Walmart as the most valuable U.S. retailer by market capitalization.

​More recently, Amazon's CEO and Founder Jeff Bezos made the headline grabbing acquisition of Whole Foods Market for a cool $13.4 billion. One would not be unreasonable in expecting Amazon to soon dominate the brick-and-mortar industry, just as it has done with the Internet.

In summation, Amazon has built a product that perfectly encapsulates the needs of the 21st-century consumer. We want everything to be one-click away and under one umbrella, and we want it at our doorstep in 48 hours.

Amazon has mastered the art of taking advantage of this modern-day consumer mentality of "more and right now." Bezos' baby has grown exponentially, forced smaller businesses to close their doors, and has kept people coming back time after time.

But, at what point would the one-stop shoppers not come back to Amazon? How valuable is Amazon to the American consumer? LendEDU strove to answer these questions in our most recent poll.

More Than A Quarter of Amazon Prime Members Question the Service's Worth

Amazon Prime is the company's flagship paid subscription service that gives users access to free two-day delivery, streaming video and music, and other benefits for a yearly fee of $99. To uncover some insights pertaining to Amazon Prime, LendEDU polled 1,000 Prime members on 17 questions related to the service.

To start things off the bat, we posed the following question to each respondent: "Currently, an Amazon Prime yearly membership costs $99, do you think it is worth it?"

While the clear majority of respondents, 71.80 percent, believe their $99 yearly fees for Amazon Prime is worth it, there was still a noticeable cohort of consumers that were left wanting more. 14.90 percent of poll participants flat-out said their Prime membership was not worth it, while 13.30 percent were undecided. Any service is going to have its naysayers and detractors, but to see that Amazon Prime, a product that seemingly has no vulnerabilities, had 28.20 percent of users questioning its worth was quite surprising.

After discovering what our respondents thought about the value of the current Amazon Prime membership fee, we posed some hypothetical Prime membership fees to see how deep consumers would reach into their pockets to hold onto Prime.

As one can see from the above chart, Amazon Prime is walking quite the tight rope with most of its users. When we set the hypothetical yearly fee at $100, just one dollar above the actual fee, 22.10 percent of respondents said they would not renew their Prime memberships. When the theoretical Prime fee was then bumped up to $150, the majority of respondents, 67.30 percent, stated that they would cut their Amazon Prime memberships.

The vast majority of Prime members, 85 percent, still would not renew their memberships if the yearly fee was raised to $200. When the hypothetical fee was again raised, this time to $300, 89.80 percent of the 1,000 respondents stated they would cancel their Amazon Prime memberships. Finally, 91.90 percent of poll participants would not retain their Prime memberships if the annual fee was $300.

What can be taken from this hypothetical series of questions?

First, Amazon should not consider a raise in the annual fee anytime soon. Even a moderate fee increase to $150 would cause the online retail giant to lose 67.30 percent of their consumers. Heck, 22.10 percent of Prime users said they would discontinue their membership even if the fee was bumped by one dollar to $100. So, despite Amazon Prime's extraordinary convenience and versatility, most Prime users are at their budget ceiling and will literally leave at the drop of a dime.

All of this being said, it is evident that there is still a small cohort of Prime members that are seemingly willing to pay any fee that is presented to them. Amazon Prime could raise its annual fee to astronomical levels, but it would be left with a small number of wealthy users. It is doubtful that strategy would bring in the same profits for Amazon Prime.

Nearly Three-Quarters of Prime Members Will Renew Membership Next Year

We asked our 1,000 Amazon Prime-using respondents the following question to reveal their intentions for next year: "Do you plan on renewing your Amazon Prime subscription next year?"

Even though the comfortable majority of Prime members, 73.80 percent, stated their intentions to renew Amazon's flagship service next year, the results from this question were not the best-case scenario for Amazon. 10.30 percent said they will not be renewing their Prime membership for another year, while 15.90 percent were undecided.

A recent report found that 91 percent of all first-year Amazon Prime members renew their subscriptions for the subsequent year, and that 96 percent of all two-year Prime users retain their annual subscriptions for a third year.​ Depending on where the "undecided" vote lands, Amazon could find itself dealing with one of its lowest annual retention rates, according to LendEDU's poll.

How Does Prime Stack Up Against Other Popular 21st-Century Services?

When you think of services that mean the most to the 2017 consumer, a few come to mind. There are ride-sharing services like Uber and Lyft, peer-to-peer payment services like Venmo, food-ordering services like GrubHub, and streaming services like Netflix and Hulu.

In terms of popularity, Amazon Prime can go toe-to-toe with any one of the aforementioned companies, but what about preferability?

​

Our 1,000 poll participants were asked to answer the following two questions: "If you had to pick one, would you choose an Amazon Prime membership or a ride sharing service (ex. Uber or Lyft)?" and "If you had to pick one, would you choose an Amazon Prime membership or Netflix?"

Judging from the results of these two questions, American consumers were much more willing to relinquish their ride-sharing service when compared to Netflix. 11.30 percent of respondents would rather give up their Amazon Prime membership instead of their ride-sharing service like Uber or Lyft. In comparison, 36 percent of consumers favored giving up their Prime membership as opposed to forfeiting their Netflix subscription.

​Regardless, these responses proved how valuable Amazon Prime is to its users. Both questions resulted in a clear majority of respondents preferring to keep their Amazon Prime membership over other valuable services like Uber and Netflix.

The results from this poll did uncover an interesting trend that can be tied back to the streaming service offered by Amazon Prime. Respondents were way more reluctant to part with Netflix than they were with a ride-sharing service like Uber or Lyft. This was intriguing because Amazon Prime offers its own streaming service with original content, similar to Netflix. Amazon Prime does not yet offer any type of ride-sharing service that would be able to replace Uber or Lyft.

Essentially, respondents believed the services offered by Netflix could not be replaced by the streaming services of Amazon Prime, and many were willing to sacrifice their Prime membership due to this lack of quality from Amazon's streaming business.

Amazon's Impact on the Way We Shop

Amazon Prime's impact on the American economy is not exactly a secret. Amazon's ability to sell everything under the sun online and at a fraction of the cost has caused countless brick-and-mortar retail shops to shut their doors while also eliminating hundreds of thousands of jobs.

A report by the Institute for Local Self-Reliance found that Amazon has caused 135 million square feet of retail space to become vacant, or the equivalent of roughly 700 empty big-box stores and 22,000 closed Main Street businesses. The same report also estimated that Amazon's growth has resulted in a net loss of approximately 150,000 jobs after accounting for the number of jobs that the online giant has created.​

We asked our respondents the following: "For an identical product, would you rather shop in-store at a physical location or purchase the item on Amazon Prime?"

For an identical product, 63.70 percent of Amazon Prime members would rather purchase the item on Amazon's website instead of going to an actual store, which was preferred by 36.30 percent of respondents. In 2017, this should not come as much of a surprise for anyone. People want things as soon as they see it, they want it in their hands not long after that, and they want to do all of that from the comfort of their couches.

But, how do consumers feel about their preferences? To find that out, we asked the following: "Amazon Prime has damaged the mom-and-pop economy. Does this statement make you feel remorseful about shopping on Amazon Prime?"

As one can see from the above graphic, a small number of Amazon Prime members, 21.70 percent, feel remorseful about giving their business to the publicly traded company, and not the small local business.

Meanwhile, 29.20 percent feel no sympathy for their shopping behaviors, and 49.10 percent of respondents, the simple majority, feel bad for a time until they reap the benefits of being Prime members.

What the results of this question display is that no one should be expecting a sudden reversal in consumer trends anytime soon. Guilt from Amazon Prime shopping is only temporary, but continuing to use the service because of its convenience and free two-day shipping seems to have become a permanent behavior.

​It can be understood that Amazon Prime members, and 21st-century consumers in general, want to shop online as opposed to going to the brick-and-mortar store. But, are there any products that even Prime users feel must be bought in-person?

According to Amazon Prime members, large home appliances like a dishwasher or an oven are products that must be bought in-person. Other products that were commonly selected by our respondents included a mattress, food, shoes, and other clothing items not including shoes.

The Best, Most Used, and Most Desired Amazon Prime Features

The 1,000 Amazon Prime members that participated in this poll were asked the following: "What is your favorite feature of Amazon Prime?"

Not surprisingly, "free two-day shipping" received the lopsided majority of the vote. 84.60 percent pointed to Amazon Prime's free two-day shipping as the service's best feature, while 7.20 percent said "Amazon Video," and 4.90 percent declared their favoritism for Amazon Music. Another 3.30 percent said "other."

Amazon Prime's free two-day shipping is the most beloved feature, but is it the most used as well? According to our poll, the answer once again would be an overwhelming yes.

We listed out 18 of Amazon Prime's features and allowed respondents to select all of the features that they use. The results can be seen in the infographic below.

As the all-too crowded and colorful pie chart depicts, Amazon Prime's free two-day delivery feature is the most widely used amongst Prime members (25.85%). A few other popular features include Prime Video (12.41%), Prime Music (8.14%), Prime Now (8.14%), and Prime Rewards (6.35%).

Amazon Prime offers a litany of features for its paying members, but are there any potential add-ons that the service is missing? What are the most desired Amazon Prime services?

We asked our respondents the following: "Which of the following theoretical Amazon Prime services do you wish was included?"

According to our poll participants, the service they coveted the most from Amazon Prime was something mirroring cable or live television. 31.60 percent selected "cable" as the service they would most like to see added to Prime, while 27.70 percent desired a cell phone service similar to Sprint or Verizon. 16.70 percent wanted to see a food ordering and delivery platform, 12.70 percent called for a travel booking platform, and 8.40 percent wished to see ride sharing platform added to Prime's lineup. Finally, 2.90 percent of respondents coveted a room sharing service like AirBnB.

Transitioning from the results of the previous question, we actually asked our respondents to answer a question pertaining to live TV on Amazon Prime. Recently, the National Football League (NFL) and Amazon Prime reached an agreement in which the NFL paid Amazon $50 million to stream 10 Primetime Thursday Night Football games.

We asked our respondents this: "Would you ever watch an NFL game via Amazon Prime?"

Interestingly, the plurality of respondents, 38.10 percent, stated that they would actually prefer watching NFL games on Amazon Prime over traditional methods of viewing. 31.40 percent of Prime consumers said they would consider watching a football game through the streaming service if they had no other option. Meanwhile, the lowest percentage of poll participants, 30.50 percent, said they would never watch a professional football game on Amazon Prime.

Between the results from both the question regarding NFL football games and the one regarding adding live TV to Prime's list of services, it would seem Amazon would greatly benefit from adding some sort of live TV service to Prime.

Do Prime Members Know Who the CEO of Amazon Is?

​As a final question, we decided to have some fun with our 1,000 poll participants and asked the following question: "Who is the CEO of Amazon?"

Impressively, the majority of respondents, 53.90 percent, correctly stated that Jeff Bezos was the current CEO of Amazon. 18.10 percent believed Tim Cook (Apple) was the CEO, while 10 percent incorrectly answered that Elon Musk (SpaceX) was Amazon's CEO. An additional 18 percent of respondents believed the author of this very article, Mike Brown, was Amazon's CEO (I wish!).

Methodology

All of the data that was used in this report came from a poll commissioned by LendEDU and conducted online by online polling company Pollfish. In total, 1,000 American consumers ages 18 and up were polled on each of the 17 questions. With the help of a screener question, we also ensured that every single one of the 1,000 respondents was a current member of Amazon Prime. This poll was conducted over a two-day span, starting on October 10th, 2017 and concluding on October 11th, 2017. Respondents were asked to answer each of the 17 questions honestly and to the best of their ability.

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Read the original article on LendEDU.

Mike Brown

Mike is a Research Analyst at LendEDU. He has written about everything from personal finance and student loans to the most recent millennial trends. Mike's work has been featured on The Washington Post, Business Insider, The Wall Street Journal, Forbes, CNBC, and many more. Follow Mike on Twitter @mikebrownEDU for his latest opinions.

Notice: This post may contain affiliate links. If you click a link and make a purchase, we may financially benefit from your transaction, at no additional cost to you. Thank you for your support.
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Guest Post: Forget Challenging Venmo, Zelle Has an Identity Crisis

Forget Challenging Venmo, Zelle Has an Identity Crisis

By Mike Brown

Original article here.

In June, Zelle was formally introduced as a new P2P (peer-to-peer) payment platform that could challenge Venmo’s supremacy in the digital payment market space.

After all, more than 30 financial institutions, including banking heavyweights JPMorgan Chase, Wells Fargo, and Bank of America, put aside their differences to create a P2P payment app that could rival PayPal’s Venmo.

As of now, Zelle can be used through the mobile applications of nine banks, including Bank of America, Capital One, and PNC Bank. Over the next 12 months, more than 30 partnered financial institutions will honor their commitment to roll out Zelle on their apps. At some point in 2017, Zelle will launch a standalone app that will allow consumers of non-Zelle network banks and credit unions to use the P2P payment service.

However, no matter how many banks join the Zelle Network, the app will not succeed if it cannot fix two major issues: People do not know what Zelle is, and it will be an extremely hard sell to try to switch Venmo users into Zelle users.

This problem was exposed in a poll commissioned by LendEDU where we asked Venmo users a series of questions pertaining to Zelle.

To lead off the survey, we asked 500 Venmo users the following question: “Have you heard of Zelle?”

A whopping 93.9 percent of Venmo users have never even heard of Zelle. Only 6.1 percent have gotten wind of the newest P2P app on the digital payment block.

This is obviously not good for Zelle and the banking industry that is working so hard to cut into Venmo’s market share. The Zelle Network needs to do a better job of getting the word out about this app, or it will fall by the wayside.

In the next question, the same pool of Venmo users were asked to answer the following: “Do you know what Zelle is?”

Once again, the results of this question produced results that will not be met with smiles from the Zelle Network. 88.1 percent of respondents simply answered “No.”

Only 7.6 percent of Venmo users that were polled knew or guessed that Zelle was an app for P2P payments. 2.3 percent believed it was an app for ordering food, while 0.7 percent believed it was a competitor to Uber and Lyft.

So what exactly is Zelle?

Aside from being a mobile app for P2P payments, Zelle uses a bank membership model for its users. Zelle wants to become the mobile payments industry’s first unified consumer brand. The millions of Americans that are customers of Zelle’s partner banks will be able to seamlessly send money to another consumer’s bank account, even if they use a different bank than the sender.

The third question in this poll aimed to discover if Venmo users were willing to make the switch from Venmo to Zelle. We asked 500 Venmo users “Zelle is a new peer-to-peer payment app launched by the major banks. Do you think you would switch from Venmo to a mobile payments app, like Zelle, inside your native banking app?”

The majority of Venmo users, 63.42 percent, said they would not give Zelle a try. “No, I love Venmo,” was the exact answer they chose. Only 36.58 percent answered “Yes, I would give it a try.”

Getting consumers to move away from Venmo and towards Zelle is going to be a challenge for the new P2P payment app. Venmo works fine, is easy to use, and has a social media flare to it that appeals to users, especially millennials. Venmo has become so ingrained into our society that the word “Venmo” has become a verb, similar to the way people say “just Google it.” The old saying goes “if it is not broke, why fix it?” and that adage can be used to describe the favoritism of Venmo over Zelle.

The only way Zelle is going to be able to convert Venmo users is by differentiating its app so that it has features that Venmo lacks, which is where our next few questions come into play.

One of Zelle’s main selling points is that transferred funds will be available in your bank account to use instantly. Funds transferred via Venmo are not available for immediate use, but instead take one business day (usually) to show up in your bank account. This is a perceived weakness of Venmo that Zelle is looking to exploit.

We asked Venmo users their take on the subject. “Do withdrawals from Venmo take too long to get to your bank account?” was the question posed to our respondents. The majority of poll participants, 60.62 percent, answered “No, withdrawals from Venmo are quick and fine.” Meanwhile, 39.38 percent stated that they thought Venmo withdrawals take too long.

So, it appears that Zelle’s immediate withdrawal feature is not as amazing of a selling point as one might have thought. For what it’s worth, Venmo is planning to roll out an instant withdrawal feature at a later date; to use this feature, Venmo users will have to pay an extra 25 cents per transaction.

Well, Zelle is partnered with major U.S. banks, so they can pitch security as a reason to use their app over Venmo, right?

Wrong. We asked the same pool of respondents to answer the following, “Are you worried about the security of your banking and personal information on Venmo?”

The vast majority of Venmo users, 78.51 percent, are not worried about their personal and banking information being unsecure on Venmo. Only 21.49 percent responded by saying they were worried about sensitive information getting leaked via Venmo.

In a similar question related to security, we asked this question: “Would you feel more secure making peer-to-peer mobile payments with an app supported by your bank or an independent app like Venmo?”

Finally Zelle received some favorable statistics from our poll. 57.30 percent of Venmo users answered “Yes, I would feel more secure.” In comparison, 42.70 percent of respondents stated “No, I would not feel more secure. I trust the security of independent apps.”

Venmo users using a mobile payment platform would feel more secure using Zelle, an app supported by the banks, over Venmo. But, that does not mean security is a huge selling point for consumers, and even if it was, users are not overly concerned with Venmo’s security safeguards. More than three quarters of respondents said they were not worried about their information getting stolen on Venmo. Additionally, more respondents said they would feel more secure with a bank-backed payment app over Venmo, but the margin was slim.

It will be interesting to monitor Zelle’s performance for the remainder of 2017 and beyond, but judging off of LendEDU’s poll, it does not look good for the P2P mobile payment app. The app faces two major obstacles: No one knows what Zelle is, and Zelle will have a hard time convincing consumers that its unique selling points make it worthwhile to stop using Venmo.

Methodology

LendEDU commissioned this poll that was conducted by online polling company WhatsGoodly. In total, 500 Venmo users were asked to answer the six aforementioned questions truthfully. This poll was conducted from July 9, 2017 to July 28, 2017.

The original article is on the LendEDU website:

https://lendedu.com/blog/forget-challenging-venmo-zelle-identity-crisis/

Notice: This post may contain affiliate links. If you click a link and make a purchase, we may financially benefit from your transaction, at no additional cost to you. Thank you for your support.
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Guest Post: Millennials & Credit Cards Survey & Report

 Millennials & Credit Cards Survey & Report

By Mike Brown

Original article is here.

It’s 2017, and having a credit card is like having a cellphone, everyone has one.

Credit cards have become a critical financial instrument that many Americans become all too reliant upon. For better or worse, consumers use their credit cards for everything from groceries to that month’s water bill.

For something that can be such a useful and impactful tool, credit cards carry significant risks if not handled properly.

Misusing a credit card can lead to borrowing more than you can afford to repay, which leads to lost money on late fees and getting charged a penalty APR. Missed or late payments can have a damaging impact on your credit score, which will lead to difficulty in getting a loan or new line of credit in the future.

The risks, but also the benefits, are clear when it comes to credit cards. Credit cards offer sign-up bonuses, cash back, and other promotions for everyday spending.

To find the answer to that question, LendEDU commissioned a poll asking 500 millennials a variety of questions regarding the plastic in their wallet.

Why millennials? Millennials are not only the largest living generation on Earth, but many are just beginning their usage of credit cards, and their young credit histories are more at risk to be significantly damaged by credit card misuse.

The results of LendEDU’s Millennials & Credit Cards Survey showed some positive trends amongst millennials, but also some results that were very concerning.

Full Results From the Millennials & Credit Cards Survey

1. Which of these reasons best describes why you have a credit card?

• 69.40% wanted to build a credit history
• 13.40% wanted to use a credit card to help their monthly cash flow
• 13% wanted to earn rewards on their purchases
• 4.20% had parents that opened their credit card account for them

2. Did a sign-up bonus incentivize you to open a credit card?

• 61.40% said no, a sign-up bonus did not incentivize them
• 38.60% said yes, a sign-up bonus did incentivize them

3. Which of the following best describes your credit card usage?

• 52.40% pay off their balance in-full each month
• 47.60% carry a balance on my credit card from month to month

4. Have you considered opening up a balance transfer credit card to pay down your credit card balance?

• 66.39% said no, they have not considered a balance transfer credit card
• 33.61% said yes, they have considered a balance transfer credit card

5. Would you consider the thought of using a credit card a scary thing?

• 58.80% said no, they do not consider the thought of using a credit card a scary thing
• 41.20% said yes, they do consider the thought of using a credit card a scary thing

6. Are you dependent on your credit card for basic living expenses (e.g. monthly rent, groceries, water bill, etc.)?

• 69.40% said no, they are not dependent on their credit card for basic living expenses
• 30.60% said yes, they are dependent on their credit card for basic living expenses

7. Do you see your credit card as a status symbol?

• 76.40% said no, they do not see their credit card as a status symbol
• 23.60% said yes, they see their credit card as a status symbol

8. How many credit cards do you have?

• 52% said they have one credit card
• 24% said they have two credit cards
• 12% said they have three credit cards
• 7% said they have five or more credit cards
• 5% said they have four credit cards

9. What was your primary reason for opening up an additional credit card?

• 33.75% wanted a card that offered better rewards or cashback
• 32.08% wanted a higher credit limit
• 15% said other
• 9.58% wanted to do a balance transfer to save money on interest
• 9.58% wanted to take advantage of a new sign-up bonus

10. Have you ever completely missed a credit card payment?

• 71.40% said no, they have never completely missed a credit card payment
• 28.60% said yes, they have completely missed a credit card payment

11. What is the impact of a late payment on your credit score?

• 76.92% said their credit score would go down
• 17.48% said their credit score would not change
• 5.59% said their credit score would go up

12. If your credit card company increases your interest rate, can you do anything about it?

• 68.40% said no, they must accept it
• 31.60% said yes, they can refuse the increase

13. Do you know your current credit card limit?

• 83% said yes, they know their current credit card limit
• 17% said no, they do not know their current credit limit

14. Have you ever maxed out your credit card limit?

• 64% said no, they have never maxed out their credit card limit
• 36% said yes, they have maxed out their credit card limit

15. Do you know your current interest rate on your credit card?

• 55.40% said yes, they do know the current interest rate on their credit card
• 44.60% said no, they do not know the current interest rate on their credit card

16. Do you know the late-payment fee charged by your credit card company?

• 65.60% said yes, they do know the late-payment fee charged by their credit card company
• 34.40% said no, they do not know the late-payment fee charged by their credit card company

17. Do you know the penalty APR charged by your credit card company after a late payment?

• 52.20% said no, they do not know the penalty APR charged by their credit card company after a late payment
• 47.80% said yes, they do know the penalty APR charged by their credit card company after a late payment

Observations & Analysis

Millennial's Usage of Credit Cards Is a Bit Cavalier

Overall, millennials have a great grasp in terms of why they should have a credit card. The absolute majority of respondents, 69.40 percent, said they took out a credit card in order to build a credit history. This is an excellent reason to have a credit card; you can never be too young to start building credit, and a strong credit score will pay dividends later on in life when you need an auto loan or a mortgage.

Judging by the results of our poll, many millennials are dependent on their credit card for basic living expenses such as monthly rent, groceries, and utility bills. 30.60 percent are dependent on their card for these types of expenses, while 69.40 percent are not. Most financial experts argue that credit cards should not be used for serious (and hefty) expenses such as monthly rent and bills.

​Another interesting trend involving millennials and credit cards: They have too many! While 52 percent of respondents do only have one credit card, 7 percent of millennials have five or more credit cards. 24 percent have two credit cards, 12 percent have three cards, and 5 percent have four cards. One credit card is great, two is fine, three is acceptable, and anything more than four is arguably too many for a young adult.

One final observation regarding millennial's usage of their credit card(s) is that many of them have maxed out their credit card limit. Our poll found that 36 percent of millennials have maxed out their credit card before! The remaining 64 percent claimed that they have never maxed out their card. Maxing out your credit card can have ramifications for a consumer. First, it can put you in a difficult position should you run into a financial rough patch. Second, it can have a damaging impact on your credit score. Millennials should not be maxing out their credit card this frequently; in fact, using anything more than 30 percent of your credit is not a prudent financial decision.

Millennial's Perception of Credit Cards

We asked 500 millennial credit card holders the following question: "Would you consider the thought of using a credit card a scary thing?" The majority of respondents, 58.80 percent, said they do not see credit cards as a scary thing. Meanwhile, 41.20 percent of millennials do indeed see a credit card as a scary thing.

Too many millennials are intimidated by credit cards when they should not be! Sure, opening up a credit card can seem like a stressful process, but the only way to move past it is by actually doing it. Credit cards can be an extremely useful tool if used properly, and they can also greatly enhance your credit profile.

Millennial's fear of credit cards can be traced back to the Financial Crisis of 2008. ​According to an analysis of Federal Reserve data done by The New York Times, the percentage of Americans under the age of 35 (millennials) who hold credit card debt has fallen to its lowest level since 1989. Growing up through the Great Recession, millennials have an inherent fear of taking on debt of any type, especially credit card debt judging from LendEDU's poll results.

The second question regarding millennial's perspective of credit cards read like this, "Do you see your credit card as a status symbol?" 76.40 percent of respondents said that they do not see their credit card as a status symbol. Nearly a quarter of millennials, 23.60 percent, ​do see their card as a status symbol. A credit card is a useful financial tool, but a status symbol? Treating your credit card like a key to the upper echelons of society could lead to spending above your means and a mountain of debt.

Millennial's Knowledge of Credit Cards is Lacking

For the respondents in our poll that stated they have a missed a credit card payment, which was 28.60 percent of them, we asked them a follow-up question to see if they knew the repercussions of a missed or late payment. The good news is that 76.92 percent of millennials knew their credit score would go down. The bad news? Well, for starters 17.48 percent thought their credit score would remain unchanged, but it gets worse. 5.59 percent of millennials believed their credit score would go up if they missed a credit card payment. This is concerning to say the least; one can only hope that constituency of respondents was not missing payments on purpose thinking they had the system beat. "This is great. I can save money by not making credit card payments, and my credit score goes up because of it."

The results of another question proved that the majority of millennial credit card holders are unaware of a rule that allows them to protest an interest rate hike from their credit card company. 68.40 percent said they must accept an increased interest rate. Only 31.60 percent knew that they have the ability to refuse the increase. Under the Credit Card Accountability and Disclosure Act, known as the CARD Act, a credit card holder has the right to refuse to pay a higher APR set by the credit card company. While chances are slim, the credit card company might agree to the older, lower interest rate. Or, they may lower your line of credit, raise your monthly minimum payments, or cancel your card all together. If cancelled, the consumer still has a minimum of five years to pay off their card balance at the old interest rate.

In other questions related to millennial credit card holder's knowledge of their plastic, the results were a mixed-bag. 83 percent of respondents knew their current card limit, while 17 percent did not. In terms of knowing their current interest rate on their card, millennials were more split down the middle. 55.40 percent did know their current interest rate, while 44.60 percent did not know their current rate. The majority of millennials, 65.60 percent, were aware of what the late-payment fee charged by their credit card company would look like. 34.40 percent did not know what their late-payment fee would be. Finally, more millennials did not know the penalty APR charged by their credit card company after a late payment than those that did. 52.20 percent were not able to identify what the penalty APR charge would look like, while 47.80 percent said they knew the penalty APR charged by their credit card company.

Methodology

All results from this study came from a poll commissioned by LendEDU that was conducted by online polling company Pollfish. The poll ran over a two day span from June 29, 2017 to June 30, 2017. All respondents were screened to ensure all poll participants were millennials and owned a credit card. The screener question was the following, "Which of the following sentences best describes you?" Out of six potential answers, the one accepted answer was the following, "I identify as a millennial and I have a credit card." In total, 500 millennial credit card holders were polled and were asked to answer each question truthfully.

Original article is on the LendEDU site:

https://lendedu.com/blog/millennials-credit-cards-survey-report/

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