Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And what else does the data reveal?

Man using credit card and smartphone for purchasing goods online.

Image source: Getty Images

New research reveals Gen Z may be the savviest generation when it comes to credit cards. This age group is the most likely to take advantage of 0% balance transfer and money transfer deals.

So, what else does the data reveal about credit card usage in the UK? Let’s take a look.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!


How does Gen Z use credit cards?

According to MoneySuperMarket, members of Gen Z – those born between 1997 and 2012 – may be the most astute when it comes to credit cards. That’s because research from the price comparison website reveals members of this generation who avoid having to pay credit card interest are the most likely group to make use of 0% balance transfer and money transfer offers.

According to the research, 32% of Gen Z’ers who don’t pay credit card interest take advantage of 0% balance transfer credit cards. Meanwhile, 36% of the same group make use of 0% money transfer credit cards.

In stark contrast, 85% of older credit card customers – aged 65 and over – who avoid having to pay credit card interest simply clear their balance in full each month. While there’s nothing wrong with this, especially for those with a reward credit card, it does suggest older groups aren’t exploiting lengthy interest-free periods like their younger counterparts.


Using credit cards correctly

While credit cards have the power to harm finances when used incorrectly, using plastic to borrow or shift debt to 0% is an excellent way to use them to your advantage.

Jo Thornhill, money expert at MoneySuperMarket, explains this in more detail: “With the cost of living crisis becoming a growing concern, it’s time for us all to make sure we’re getting the best out of our personal finances. It starts with how we manage credit cards. When used carefully, credit cards can be a great way of helping to spread the cost of purchases and can help you get on top of your finances. However, too many Brits are paying interest on their cards when they needn’t be – particularly when there are so many good deals out there in the market.”

Thornhill goes on to explain the benefits of shifting debt to a 0% balance transfer credit card.

She explains: “Balance transfer cards are a great option for those looking to clear their debt. With this type of credit card, you can transfer your existing balances onto one low or 0% rate card, consolidating your debt all in one place at a lower interest rate. By transferring to a 0% rate card, you could also avoid paying interest for up to two years. Just be careful when it comes to the end of your interest-free period though, as you could end up paying much higher charges.”

To learn more about using plastic responsibly, take a look at our article that explains how to use credit cards the right way.

What else does the research reveal?

In addition to highlighting the credit card habits of Gen Z, the research also highlights the fact that over half of credit card users have an outstanding balance. Of this group, a third pay interest, with the average interest payment standing at a whopping £121.40 a month. That’s equivalent to £1,456.80 a year.

Among credit card users who don’t pay any interest, 68% clear their balance in full every month. Perhaps surprisingly, less than a third (31%) say they make use of credit card deals. 

Another interesting stat from the research is that those aged 35 to 44 are the most likely to have outstanding credit card debt. The average credit card balance among this age group is £1,091.80. 

To learn more about borrowing on plastic, take a look at the Motley Fool’s guide to the different types of credit cards.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »

A stack of credit cards piled on top of each other
Personal Finance

Calls for more credit card applicants to be given advertised interest rate

Did you know that under current credit card APR rules, only 51% of applicants must be given the advertised rate?…

Read more »