You have reached your limit of free articles this month.

Enjoy unlimited access to myPalmBeachPost.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myPalmBeachPost.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myPalmBeachPost.com.

Wellington millennial taps into generation’s ‘huge distrust’ of banks


Banks and big financial companies are in for a fight to win over and keep people in their 20s and early 30s, says entrepreneur Alex Cohen, 23.

“Millennials have huge distrust for the banks,” said Cohen, who grew up in Wellington. “They believe they’re getting hit with too many fees.”

His start-up firm, birchfinance.com, offers an online tool to help people maximize their credit card rewards. It is one fledgling venture among many, but a certain spirit emerges across the landscape: Optimize life down to granular detail through tech when you can. Pay attention, or get some tech that pays attention for you.

“The average shopper misses out on over $200 a year in credit card rewards by using the wrong cards in their wallet,” Birch’s website says.

This much seems clear: millennials are not turning out to be carbon copies of their parents and grandparents. They are two to three times likely than other age groups to close all accounts with their primary financial institution and switch banks, according to a survey last year by Fair Isaac Corp., the people who produce the FICO credit score. The leading reason they bolt: High fees.

“The increased volatility in this 25-34 year-old age group can be a costly exercise for incumbent banks, due to the increased marketing and operational costs required to win new customers, especially if they are only replacing the ones that have left,” said Joshua Schnoll, senior director for FICO. “Banks will need to address millennials’ sensitivities to bank fees and a desire for convenience in order to arrest churn and build loyalty.”

For their part, big financial companies say they are starting to recognize millennials are different.

Take attitudes to retirement. A survey by Merrill Edge, an investing service that combines the resources of Merrill Lynch and Bank of America, found 83 percent of millennials plan to work in retirement, whether by choice or necessity. That turns completely on its head the current situation for people already retired — 83 percent do not work.

The national survey featured particularly heavy sampling in South Florida and eight other markets, officials said.

“Retirement as we know it today will change dramatically in years to come due to a number of short-term factors that can impact long-term planning,” said Tracy Cooper, a Merrill Edge sales performance manager based in Palm Beach Gardens. “Our younger clients say they are uncertain about their retirement savings, and don’t know how much is enough. Others are skeptical that they will ever be able to fully retire.”

Factors such as the rise of the “gig economy” — where temporary jobs are more prevalent and don’t always come with traditional benefits — have led many millennials to rank an employer’s retirement plan as the most important factor when accepting a new position, Cooper said.

Whether by choice or because of tighter access to credit, millennials tend to carry less credit card debt, statistics suggest.

The percentage of people under age 35 who hold credit card debt has fallen to its lowest level since 1989, about 37 percent, according to a New York Times analysis of Federal Reserve data last year.

That analysis did not break out the average number of cards people carry, but it may reflect tighter credit standards imposed after the financial crisis. Credit cards simply became less available to students, people just out of school or those starting jobs without a well-established credit history.

Then, too, the average person under 35 already has $17,200 of student debt, nearly double that of Americans of the same age in 1995, the New York Times found.

Across the board, millennials carry outlooks on money that often set them apart — starting with how they use the most basic consumer tool, the credit card.

Millennials arrive during a golden age for credit card rewards, from airline miles to cash back, but it’s a landscape loaded with potential pitfalls. Card issuers find it worthwhile to get into an arms race on perks because they make the money back — and then some — on a subset of customers. These are the ones who slide into the quicksand of big interest and fees by failing to pay off balances each month.

And along the way, customers often lose track of the places and times when each card’s rewards are most valuable. Competing companies even taunt rivals in advertising about how hard it can be to keep up.

Enter a company like Birch.

One of Birch’s founders, Cohen grew up in Wellington, attended the University of Florida and graduated with a degree in finance and information systems in 2015.

The company based in Gainesville has received about $150,000 in start-up funding from sources including angel investors, he said. It is working on a mobile app after developing a web-based tool, he said.

The company aims to carve out its own unique niche, though Cohen acknowledges thousands of companies want to reach this generation when it comes to personal finance.

Just as online tools routinely help people find the lowest air fare or best restaurant reviews or the closest available ride-share driver, Birch sets its sights on maxing out credit card rewards, among other capabilities.

That might mean putting a gas purchase on a card giving extra rewards at the station this quarter, while steering that clothing haul to a card with the best terms for that store.

Earning and retaining the trust of its users remains important, because Birch asks them to link their accounts.

Reviews online cite its potential as a useful tool.

“Some people are able to keep it all straight in their heads, but for those of you that need a little bit of extra help, there’s now have a great solution at your hands,” a reviewer on frugaltravelguy.com wrote last year.

A commenter found it “a cool new tool” while noting a few hitches in the early stages with linking certain card accounts.

Cohen said the firm has been smoothing out wrinkles in the intervening months and is ready for the next stage in its quest to ride the wave of millennials.

“I think we’ve grown up with the mentality of trying to get the best deal,” he said.



Reader Comments ...


Next Up in Nation & World

VIDEO: Toddler reenacts 'The Fresh Prince Of Bel-Air' intro
VIDEO: Toddler reenacts 'The Fresh Prince Of Bel-Air' intro

Two-year-old Princeton Wright might not have been around when “The Fresh Prince of Bel-Air” was airing new episodes, but that didn’t stop the toddler from gleaning some inspiration from the show for his recent birthday party.  His mother, Hinesville, Georgia, photographer Neshaszda Wright of Neshaszda Z Photography, ...
Facebook’s Mark Zuckerberg surprises Ohio family, drops in for dinner
Facebook’s Mark Zuckerberg surprises Ohio family, drops in for dinner

Guess who’s coming to dinner? Mark Zuckerberg! In their wildest dreams, an Ohio family couldn’t imagine hosting dinner for one of the wealthiest people in the world, and talking about politics and an African charity they support with the Facebook founder and CEO, but that’s exactly what happened. Members of the Moore family...
Home Depot data leak compromises customers’ private info again
Home Depot data leak compromises customers’ private info again

A spread sheet listing about 8,000 customers, along with their transaction and a range of personal information, was posted for an unknown amount of time, on a Home Depot web site. No financial data was part of the list, which did not compare with the 2014 data breach in which hackers installed software that provided them with personal and financial...
Female dragonflies play dead to avoid amorous males
Female dragonflies play dead to avoid amorous males

Female dragonflies are one of only a few animal species that play dead to avoid mating or death, falling out of the sky and remaining motionless until the amorous male dragonfly leaves. That’s the conclusion of a new study in the journal Ecology by University of Zurich zoologist Rassim Khelifa, Newsweek reported. Khelifa, who documented the behavior...
Body found in Grand Canyon likely boy swept away with step-grandmother
Body found in Grand Canyon likely boy swept away with step-grandmother

Grand Canyon National Park officials said Friday that a body found is likely that of a 14-year-old hiker who went missing in the park two weeks ago with his step-grandmother. According to the New York Post, Jackson Standefer of Chattanooga, Tennessee, was swept away along with LouAnn Merrell when the two were crossing a creek on April 15...
More Stories