3 important credit card lessons from Gen Z users

Written by
John Egan
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We’re often encouraged to ask “older and wiser” folks for relationship, career and life advice. But when it comes to credit cards, you may want to seek guidance from “younger and wiser” adults—namely members of Generation Z.

Survey data released in March 2023 by research company Morning Consult suggests that while Gen Z adults in the U.S. use credit cards at the same pace as older generations, they’re better at managing their debt. The Pew Research Center defines Gen Z as people born between 1997 and 2012, meaning they now range from preteen to mid-20s.

Morning Consult cites three factors contributing to Gen Z’s lower credit card debt compared with other generations:

  1. Fewer fixed expenses at this point in their lives.
  2. Lower credit card limits that are typical of younger borrowers who are still establishing credit.
  3. Leftover savings from pandemic stimulus payments.

Still, Gen Zers “deserve credit (pun intended) for staying on top of their debts,” wrote Charlotte Principato, a financial services analyst at Morning Consult.


The youngest generation of adults seems to understand how to responsibly use revolving credit—that is, by effectively treating it as debit, or paying off as much of their balance as possible each month. They likely learned about the dangers of compound interest and are especially wary of carrying a balance in a rising-rate environment.

Charlotte Principato, Financial Services Analyst

So, what can older generations learn from their younger Gen Z counterparts about responsibly managing credit cards and debt? Here are three lessons.

1. Don’t shy away from using credit cards

Avoiding credit card debt doesn’t mean you have to avoid credit cards altogether.

Nearly two-thirds (63%) of Gen Z adults have at least one credit card, according to the Morning Consult survey. That’s on par with Generation X (63%) but less than the figure for all generations as a whole (69%), millennials (70%) and baby boomers (76%).

According to Pew Research Center data, Gen Xers were born from 1965 to 1980, millennials from 1981 to 1996 and baby boomers from 1946 to 1964.

“Gen Zers … are entering adulthood without being bombarded by credit card offers [in college] the way millennials were, with a heightened understanding of the dangers of credit card debt after seeing its impact on older generations, and in the midst of a tighter labor market that can make responsible credit use much more achievable and less daunting,” Principato noted.


These figures tell us that bigger shares of the millennial and baby boomer generations take advantage of credit cards, but by no means do credit cards scare Gen Z (along with Gen X). The Morning Consult data suggests that Gen Z may simply be taking a cautious approach to credit cards—an approach that all of us should try to copy.


To ease into responsible credit card use, consider applying for a secured credit card if you have no credit history or you have encountered trouble qualifying for credit cards.

Functioning like a traditional unsecured credit card, a secured credit card requires a refundable cash deposit to obtain a line of credit. Typically, the card issuer reports payment activity for a cardholder’s account to the major credit bureaus, which helps the cardholder build or rebuild their credit.

Credit card ownership and credit card debt by generation

Share with at least one credit card

Share with credit card debt

All U.S. adults



Gen Zers






Gen Xers



Baby boomers



Source: January and February 2023 Morning Consult survey of 8,814 U.S. adults

2. Reduce or eliminate credit card debt

As we all know, credit card debt can weigh down our finances.

For instance, carrying a credit card balance from one month to the next generally leads to interest charges. From 2018 to 2020, Americans paid about $120 billion per year in credit card interest and fees, says the Consumer Financial Protection Bureau. That works out to roughly nearly $465 a year for every U.S. adult.

It appears, though, that Gen Zers are model citizens in terms of escaping credit card interest. Gen Z carries less credit card debt than any other generation, according to the Morning Consult survey. Just 30% of Gen Z adults reported coping with credit card debt, compared with millennials (42%), Gen Xers (43%), baby boomers (40%) and adults as a whole (40%).

Gen Z adults are not only less likely to be saddled with credit card debt than other generations, but their monthly credit card payments are lower. The Morning Consult survey indicates the median credit card payment for Gen Zers was $244 a month in early 2023, while their outstanding credit card debt stood at $303. That’s a gap of only $59.

“These young adults aren’t just chipping away at their outstanding balance each month — they’re also prioritizing paying off their entire credit card debt more than older generations,” Principato pointed out.

By comparison, Gen Xers reported a median outstanding credit card debt of $2,000 and a median monthly payment of $400. Translation: As a group, Gen X adults almost certainly are being hit with more interest charges than their Gen Z counterparts.


Many Gen Z adults are striving to decrease or wipe out credit card debt every month, perhaps dodging hundreds or even thousands of dollars in interest charges in a year’s time. Although it may be easier for Gen Z adults to accomplish this due, in part, to lower expenses and lower credit limits at this state of their lives, their creditworthy behavior is still worthy of being adopted by all adults.


Set up automatic payments for all of your credit card bills, and aim to pay more than the minimum amount due each month. Ideally, you should focus on paying off the full balance of a credit card each month to steer clear of interest charges.

You can user our credit card interest calculator to get an idea of how much credit card interest you’re paying on a monthly basis.

Median outstanding credit card debt vs. median credit card payment

Median outstanding credit card debt

Median monthly credit card payment

All U.S. adults



Gen Zers






Gen Xers



Baby boomers



Source: January and February 2023 Morning Consult survey of 8,814 U.S. adults

3. Be careful about spending

Here’s something Gen Zers can gloat about: Fewer than half (47%) of them acknowledge being impulse shoppers, according to a Bread Financial study released in 2021. Of course, this means the 53% who don’t identify as impulse shoppers stand a better chance of not piling up credit card debt.

Gen Z’s thoughtful approach to spending goes beyond impulse shopping, however:

  • 88% of those surveyed for the Bread Financial study said they save up money for a purchase
  • 85% said they make a purchase only when they can cover the entire bill
  • 78% said they fear debt
  • More than half said they depend on debit cards—compared with less than 20% relying on credit cards—for small purchases such as health and beauty items or special events and nighttime activities

The study “depicts a cautious, responsible and choice-driven Gen Z consumer,” Val Greer, executive vice president and chief commercial officer at Bread Financial, said in a news release.


Resist the temptation to make impulse buys and give serious thought to how you pay for purchases that you do make. Both of these strategies may help keep you from amassing credit card debt.


Carry cash and leave your credit cards at home if you fear making a costly impulse purchase while you’re out shopping. Furthermore, create a budget so you can prioritize your monthly expenses, including credit card debt.

You can use our debt payoff calculator to help you become and stay debt-free.

How Gen Z covers expenses*


Debit card

Buy now, pay later


Clothing and personal items





Health and beauty





Special events and nighttime activities





Source: August 2021 Bread Financial survey of 2,515 U.S. consumers | *More than one payment method could be selected

John Egan
Cardratings Contributor

John Egan is a content creator and content marketing strategist in Austin, Texas. His specialties include personal finance, real estate, and health and wellness. John’s work has been published by outlets such as CreditCards.com, Bankrate, Forbes Advisor, Experian, Capital One, The Balance and U.S. News...Read more

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