By Sarah Kirkup and Christopher Leelum
A new consumer credit card report found that millennials, or those aged 18-34, are the generation least likely to say that credit card chips are the safest form of security.
Published in September by Nerdwallet, a financial education company, the report also stated that 38 percent of millennials are “not at all sure” about which type of credit card is safest, compared to 33 percent of those over 65.
This comes during the U.S.’s big shift away from magnetic strips on cards and onto embedded chips which are supposed to be more secure. These chips are inserted into scanners using a one-time encryption code, which is different with every purchase. Consumers with the magnetic strip enable thieves to scan the footprint of the swipe and gather their credit card information.
But the security depends heavily on the amount of people using the new cards, and missing out on a generation could be detrimental, according to Nerdwallet Credit Card Expert Sean McQuay.
“First, millennials have to recognize that they don’t know enough about credit cards,” McQuay, a former Corporate Strategist for Visa, said. He said millennials might be the tech-savvy generation, but they don’t fully understand how credit cards work.
Beginning October 1, all major credit card networks will be leading a liability shift onto businesses that have not adopted the new technology, called EMV. The tech is named after Europay, MasterCard, and Visa, the organizers of the shift.
“I trust the EMV chip more than other credit cards because the code from the EMV chip is a one-time transaction, so no one will be able to take it,” Cynthia Kendziewski, president of a business club at SUNY Old Westbury, said. “I think younger people who don’t trust it just are not educated in what it does.”
A survey from Creditcards.com released in April shows that 36 percent of those aged 18-29 have never owned a credit card in their lives.
Tori Iovero, a Stony Brook student majoring in Business Management is just one of many who do not own a credit card.
“I don’t have a credit card because of the fear of not being able to pay it off,” Iovero said. She also added that she has not even heard of the EMV chip that has been put into credit cards.
McQuay said much of the disconnect between millennials and credit cards could probably be attributed to lack of financial education, also adding that those who do purchase the cards go about it in the wrong ways.
“Many millennials that have cards have seen commercials of Samuel L. Jackson asking ‘What’s in your wallet?’ and then they buy the card without doing enough research,” McQuay said. “But having a good credit score takes time and is also very important because possible future employers might look at your score to see if you’re trustworthy.” Nearly half of millennials who have ever applied for a card said that they did so at least once because of an ad or promotion, according to Nerdwallet.
Financially, millennials have a deep mistrust in institutions and are 12 percent more likely to say they are “conservative” investors than the Baby Boomer generation. This data comes from a 2013 survey by Accenture, a global service and consulting company.
“I think the EMV chips should help the younger generation,” Lee Machin, Assistant Manager at Astoria Bank in Queens, said. “With the credit cards we use now, it is very easy for people to steal information. I think these cards will give them some peace of mind.”
With Nerdwallet predicting online fraud will increase when EMV cards roll out, McQuay said millennials will need all the financial education they can get before applying for a new card.