Credit cards are not hated by Gen Z. They’re afraid of them. Not foolishly, but with a risk-sensitive viewpoint. Their caution is a response to witnessing Gen X bear decades of compound interest and millennials struggle to escape mounting debt, not a sign of dislike.
The term “the ick,” which was originally used to describe dating red flags but is now used to identify financial traps, is used by more than half of Gen Z to characterize credit cards. High interest rates, unclear terms, and unexpected fees seem more like warning signs flashing beneath barely veiled advertisements than characteristics of a flexible payment system.
It’s amazing how many people still use these. The typical credit card balance for Gen Z is approximately $3,493, notwithstanding the inconvenience. Many claim that they swipe because they have to, not because they want to, when their rent is due, their food need to be restocked, or an unexpected emergency arises. Almost half do not use credit as a financial instrument, but rather as a backup plan. It has nothing to do with taking extravagant trips. It’s about getting by on Thursday.
Rates of delinquency have subtly increased. A higher percentage of Gen Z cardholders—more than 10%—than millennials at the same age are 60 days past due. Even so, Gen Z feels guilty about missing payments, unlike earlier generations who would have dismissed them as passing errors. For a youth who grew up on YouTube budgeting instructions and TikTok finance content, falling behind has a noticeable emotional cost.
| Data Point | Insight |
|---|---|
| Avg Credit Card Balance (2025) | $3,493 |
| Delinquency Rate (60+ days late) | Over 10%, higher than Millennials at the same age |
| % Gen Z Anxious Checking Credit Score | 54% feel anxious; 62% avoid checking altogether |
| Credit Card “Ick” Factor | 51–56% say credit cards are outdated or emotionally stressful |
| Use of “Buy Now, Pay Later” (BNPL) | 38% use it weekly; 96% of transactions paid on time |
| Primary Financial Barrier | 27% cite rising cost of living; followed by debt and inflation |
| Credit Behavior Shift | 60%+ have switched away from credit cards to other payment methods |
Their ability to change course has been impressive. More than 60% have completely abandoned traditional credit cards in favor of Klarna, Afterpay, or other Buy Now Pay Later (BNPL) models, debit cards, or direct payments. Remarkably, 96% of BNPL transactions are paid off on time, and 38% of Gen Z uses them at least once a week. For them, coordinating expenditures with revenue cycles is not just prudent, but also protective.
They choose instruments that do not penalize flaws. By their very nature, credit cards are meant to reward perfect monthly payments, but they may also penalize one mistake by charging compound interest. That margin for error seems harsh to someone who has only recently started working.
A strange psychological phenomena that many people report is credit score anxiety. Approximately 54% of respondents say they become nervous just thinking about their score, and 62% admit they just don’t check it. Some have never even seen it. Some, including a 23-year-old Minneapolis resident, admitted to linking her credit score to “a grade you can’t improve, no matter how hard you try.” Not out of denial, but rather for my own protection, I once went months without checking my student loan balance. It brought back memories of that time.
That fear isn’t unjustified. Twenty-seven percent of Gen Z say that their biggest financial challenge is inflation and increased living expenses. When you add in a debt-to-income ratio that was far greater than millennials’—16.05% against 11.76%—the picture becomes more clear. This generation has a lot of inherited caution and minimal safety net in the face of economic instability.
The way they’re reacting, though, is remarkably positive. Gen Z is redefining financial health around control, clarity, and emotional well-being rather than pursuing conventional ideas of creditworthiness. Debit cards are now more popular than just a safer option. They now use budgeting tools and transparent apps to describe their approach. Some now refer to credit cards as “debt cards,” a subtle linguistic revolt against decades of obfuscation. Even their financial vocabulary has changed.
Companies that provide credit cards are starting to pay attention. Some are introducing streamlined credit cards that have explicit interest-free periods and no late penalties. Others are completely falling behind fintech platforms, which provide easier-to-use tools and seamless integration into digital lives.
This is about adaptability, not recklessness. Gen Z isn’t careless with money. They have doubts about finances. In the economy they inherited, trust is earned rather than taken for granted. Not just safer, but wiser spending is what they want. Their emphasis on low-risk spending and real-time transparency isn’t simply a Gen Z peculiarity; it might serve as a model for how we all see money in the future.
Gen Z perceives credit as a double-edged sword, whereas earlier generations saw it as a stepping stone. They aren’t abandoning it completely. Simply put, their queries are more insightful. And in such a volatile economy, that might be the most responsible option.
