“Can you pay my bills/ Can you pay my telephone bills/ Can you pay my automo-bills?”
Oh, Destiny’s Child. Your song rings ever true — because we millennials are still spending most of our money on bills: groceries, gas, and the like, according to a recent Bankrate survey.
And although even Beyoncé herself can’t change that, one strategy that could help is also one many millennials overlook: paying with a credit card.
Revealing millennials’ spending habits
According to Bankrate’s survey of 1,002 adults, millennials’ spending habits show they spend more than other generations on groceries, gas, restaurants, and cell phones.
The only categories in which they spend less? Television and travel.
Image Credit: Bankrate
Not only that, but the amount they spend in certain categories is nutty. Take groceries, for example: $9,568 per year, or nearly $800 per month!
That might sound surprising, but don’t forget many millennials are now parents — which means more mouths to feed.
“Because I have three kids I always surprise myself every week at how much I spend on groceries,” 35-year-old Joanna Horowitz told Bankrate. “It just never seems like we have enough food. I have to go to the store at least two or three times a week.”
If you’re spending crazy amounts on your bills, then the obvious solution is to cut back where you can. But at the end of the day, there’s only so much fat you can trim. So if you’re going to spend that money, you might want to consider paying with a credit card.
I know, I know. You’ve heard credit cards are evil — which might be why, according to wildly different survey results, only 33 percent, 59 percent, or 83 percent of millennials have one.
Should you pay with a credit card?
Writer Dana Sitar is one of the many millennials who’s chosen not to have a credit card.
“I’m not sure I trust myself to use it responsibly,” she explained. “I’d guess other millennials feel the same, because we’ve seen people go so deep into debt from spending beyond their means.”
Those are legitimate concerns, and if you won’t be able to use a credit card responsibly, then it’s probably best not to get one.
But if you’ve only avoided credit cards because you don’t want to pay interest, it’s important to realize it doesn’t have to be that way.
Instead of keeping a tab and racking up interest charges, use your credit card like a debit card, and pay your bill in full each month. When used like that, credit cards can be a powerful tool in your financial arsenal.
Want proof? Let’s say you’re like the average millennial surveyed, who spends $9,568 on groceries and $3,048 on gas each year.
If you signed up for the American Express Blue Cash Preferred, you’d get 3 percent cash back on gas and 6 percent on up to $6,000 of groceries.
Combine that with the 1 percent cash back you’d get on all other purchases, and at the end of the year, you’d have an extra $527.
How nice would that be? Even better, if you invested that money annually, it could grow into big bucks by the time you retire.
Or, you could put your purchases on a travel rewards card. If you have good credit, the Chase Sapphire Reserve is the cream of the crop; you’ll get three points for every dollar you spend on travel or dining. Points that could be used to finally take that dream vacation to the likes of Italy or Bali.
You see? If you pay with a credit card and then pay it in full each month, you’ll benefit from the money you’re already spending.
Just spend responsibly, and your finances might eventually shine so much that even Queen Bey would be proud.
Interested in a personal loan?
Here are the top personal loan lenders of 2018!| Lender | APR Range | Loan Amount | |
|---|---|---|---|
1 Includes AutoPay discount. Important Disclosures for SoFi. SoFi Disclosures
2 Includes AutoPay discount. Important Disclosures for Payoff. Payoff Disclosures
3 Important Disclosures for FreedomPlus. FreedomPlus Disclosures
4 Important Disclosures for Citizens Bank. Citizens Bank Disclosures
5 Important Disclosures for LendingPoint. LendingPoint Disclosures
6 Important Disclosures for LendingClub. LendingClub DisclosuresAll loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer. 7 Important Disclosures for Earnest. Earnest Disclosures
8 Important Disclosures for Avant. Avant Disclosures* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC. ** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33 * Important Disclosures for Upgrade Bank. Upgrade Bank Disclosures* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements. ** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days. |
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 | 7.73% – 29.99% | $1,000 - $50,000 | Visit Upstart |
 | 6.26% – 14.87%1 | $5,000 - $100,000 | Visit SoFi |
 | 6.99% – 35.97%* | $1,000 - $50,000 | Visit Upgrade |
 | 5.99% – 24.99%2 | $5,000 - $35,000 | Visit Payoff |
 | 4.99% – 29.99%3 | $10,000 - $35,000 | Visit FreedomPlus |
 | 5.99% – 18.99%4 | $5,000 - $50,000 | Visit Citizens |
 | 15.49% – 34.49%5 | $2,000 - $25,000 | Visit LendingPoint |
 | 6.16% – 35.89%6 | $1,000 - $40,000 | Visit LendingClub |
 | 6.99% – 18.24%7 | $5,000 - $75,000 | Visit Earnest |
 | 9.95% – 35.99%8 | $2,000 - $35,000 | Visit Avant |