Gen Z Consumers Are Using Credit More, and Differently, than Their Millennial Counterparts at the Beginning of their Credit Journeys

New TransUnion study finds Gen Z borrowers lean more heavily on credit cards and auto loans

LAS VEGAS, May 08, 2024 (GLOBE NEWSWIRE) -- Gen Z consumers are tapping into credit at higher levels than their Millennial counterparts did in the early stages of adulthood (ages 22-24). TransUnion (NYSE: TRU) released these findings today at the company’s 2024 Financial Services Summit, attended by nearly 300 global financial services executives.

The new TransUnion study, Solving for Z, explored credit usage by today’s Gen Z consumers and compared it to similarly aged Millennials one decade ago¹. The study found that both Gen Z and Millennial borrowers faced early challenges in their credit journeys. 75% of surveyed Gen Z consumers said they had their finances negatively impacted by the pandemic-induced recession, while 60% of Millennials said the Global Financial Crisis had negatively impacted them. However, today’s Gen Z consumers have also faced an additional challenge – a rapid rise in inflation.

“Gen Z consumers have seen their finances significantly impacted by the pandemic and its aftermath, even more so than the challenges faced by Millennials as a result of the Global Financial Crisis,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “This likely has played a key role in the shifting priorities of Gen Z consumers, both in the types of credit they are seeking, and the way they are using that credit once they gain access to it.”

The study², which included analysis of recent credit data for Gen Z consumers as well as credit data from 10 years ago for Millennials, found that Gen Z borrowers are opening more credit lines and have both higher debt levels and delinquency rates compared to Millennials at the same age. Yet, Gen Z borrowers also are performing in a similar manner to younger generations of the past in comparison to older generations (i.e. younger generations typically have higher delinquency rates as a group than older ones). The study found that 84% of credit-active Gen Z consumers had at least one credit card (bankcard) as of Q4 2023. This is significantly higher than the 61% of credit-active Millennials who had at least one card 10 years prior. This comes as nearly 36% of Gen Z consumers ranked credit cards as the most useful credit product, up from 29% of Millennials a decade ago.