Young consumers depend on plastic

SAN FRANCISCO -- Consumers born in the 1980s are the leading edge of a generation that is shunning paper payments like no other before it.\nThese young consumers so consistently reach for debit and credit cards that Visa USA has anointed the age group "Generation Plastic," or "Gen P."\nPlastic payments, including online commerce, now account for 50.4 percent of the spending among consumers ranging from 18 to 24 years old. Consumers 25 to 34 years old spend about 45 percent either way, while everyone older still uses cash and checks at least half the time, according to Visa, the nation's largest payment network.\n"All paper-based payments are in retreat," said David Robertson, publisher of The Nilson Report, a newsletter that's been following spending trends since 1970. \nGen P isn't using credit cards any more frequently than other age groups, but depends more heavily on debit cards. Gen P uses debit cards to pay for 28.2 percent of their purchases compared to just 7.1 percent among those older than 45, according to Visa.\nEven though they aren't directly adding to consumer debt, debit cards are diminishing the nation's already paltry savings rate, said Howard Dvorkin, president of Consolidated Credit Counseling Services. That's because consumers paying with a plastic card tend to spend substantially more than someone paying with cash or check, Dvorkin said.