Wednesday, September 20, 2017

Why the Canadian market needs a rewards credit card targeted towards Millennials

There are lots of rewards credit cards in the Canadian market and we mean a lot. Well over 100 options out there and yet most follow the same premise. Pay an annual fee, meet a spend requirement, get rewarded for your spending. That will never change as that's what rewards cards are really about. However someone needs to break the standard. There is very little specific market targeting with cards. True you have to meet certain requirements to get cards like annual incomes etc. but outside of one or two cards targeted to students and one card targeting seniors/retirees there aren't any cards hitting up the biggest generational market out there: Millennials.

Millennials make up a huge portion of today's market and yet most credit cards on the market don't specify them as a market. Many of the cards on the market today, old and new are still running on the premise of non-generational targeting and rewarding what us gen x'ers and baby boomers (people born in the 50s, 60s and 70s) generally spend money on. Wonder why so many premium cards have bonus multipliers on gas station purchases? We drive minivans to soccer games and dance practices every day or in my case a huge SUV that guzzles gas so gas station multipliers make a lot of sense. But for the 20 or 30 something year old does that really appeal to them? Not as much. These are the people eating out more, ordering meals delivered to your door, taking ride sharing services everywhere and are even helping transit make a comeback. To them they aren't going to be buying a minivan or a big SUV any time soon.

The industry needs to follow the trends of what has become a big and appealing market. This on-demand generation likes pay as they go, spending money on subscription boxes, transit passes and enjoying food delivered through an app on their phone. Reward the Millennials on what they like to spend money on, a much different strategy of spending than those of us who are over 40. The funny thing is if a card company did target Millennials with a card it would more than likely provide a lot of spill over to other generations as those not considered Millennial do try to keep up with them. I’m not part of the Millennial generation but I can tell you as a parent of two very active teens we also use companies like food delivery services a lot when schedules don’t allow for a home cooked meal, we ride share on vacation and make use of many services that would be considered for the Millennial generation. So a credit card issuer would be smart to come out with a card that does target Millennials as in the end it could and would be a winner not only for them but the older generations and even the upcoming generation of Post-Millennials or Generation Z's. Right now Millennials are the 'it' generation and most reward programs and credit cards have not jumped at the fact that they are the trend that needs to be targeted right now and for 2018 at the very least!

The good news is there just may be such a card coming to the market sooner than you think. With lots of chatter happening on social, American Express is gearing up to launch a new card next week. Stay tuned for more details at that time. Cobalt.

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