Millennials may balk at taking on a lot of credit card debt, but when it comes to opening new credit cards to reap the benefits of rewards points, it’s become the new hobby among throngs of them.
The Wall Street Journal reported about millennials who have as many as 40 credit cards, earning them close to 1.5 million rewards points, with some holding duplicate cards and opening credit cards in every city they visit. The aim is to take advantage of the often generous perks of high-end cards. Fueling the newfound obsession are the credit card companies, namely JPMorgan Chase and its Chase Sapphire Reserve card. Chase had been offering 100,000 reward points up until recently, reported the WSJ. The card was in such demand that JPMorgan ran out of the metal needed to make the cards 10 days after it was first launched. In order to compete with Citigroup, American Express and other credit card issuers beefed up their own rewards offerings, driving even more demand.
These credit card-obsessed millennials are one of the reasons why new credit card signups jumped 14 percent in the third quarter compared to a year ago, reported the WSJ, citing TransUnion. Among people ages 40 and under, credit card balances grew during the last quarter of 2016, noted the paper.
Mary Xu, a San Francisco cyber security manager, is one of the self-proclaimed credit card fanatics profiled in the WSJ story. She told the paper she spends more than $1,000 each year just on the fees to access high-end credit cards with generous rewards points. Last October she was turned down by JPMorgan Chase for the Sapphire Card and sent the bank a picture of herself dressed in a Sapphire Credit costume she constructed from cardboard hoping to get the bank to reconsider. Three months later she was approved for the card.