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The vast majority of Millennials who stumbled upon additional money would use it to pay down existing debt or invest in something, a new survey conducted by Goldman Sachs Investment Research shows.
- 43% of Millennials would use the extra money to pay down debts.
- Another 47% would invest the money in some way: they’d save it for buying a house, they would invest it with the some professional assistance, or they would invest in starting a business.
- Spending the money wasn’t a popular choice: only 9% of Millennials said they’d directly buy goods with the money.
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These macro trends have significant implications for various segments of the financial industry. Prudent spending habits can hurt card networks like Visa that depend on increasing quantities of transactions, since most of their revenue comes from network fees they charge per transaction. Lower transaction counts implies lower payment volume, and this could also hurt banks, which earn revenue from interchange fees that are set as a percentage of payment volume.
High levels of debt can also be a boon to alternative lenders. People with high amounts of debt might look for ways to consolidate or refinance their debt, and alternative lenders often offer these refinance options on usable sites that could be palatable to digital-savvy Millennials.
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