Gen Z Consumers Are Using Credit More, and Differently, than Their Millennial Counterparts at the Beginning of their Credit Journeys - Seite 2

Gen Z Consumers Are Using Bankcards and Auto Loans More than Their Millennial Counterparts Did At the Same Age 10 Years Prior
Product Penetration Among Credit-Active Consumers

	Millennial 22-24 Year Olds in Q4 2013	Gen Z 22-24 Year Olds in Q4 2023
Credit Card (General-Purpose Bankcard)	61%	84%
Credit Card (Private Label)	44%	26%
Student Loan	49%	34%
Auto	25%	30%
Personal Loan	5%	5%

Source: TransUnion Consumer Credit Database

Increased card usage comes amidst elevated inflation

The increase in card usage among Gen Z consumers is not necessarily unique to this demographic, as consumers as a whole have been using credit cards more to manage the significant and enduring growth in inflation over the past decade, particularly in recent years. Since Q4 2013, the consumer price index has cumulatively risen 32%, driving many consumers to use their credit cards as a financial backstop to help with increasing costs. A recent TransUnion report found that due to this increased usage, the total credit card balance held by U.S. consumers tipped past $1 trillion for the first time in 2023. In addition to rising credit card balances, higher prices have contributed to higher balances among Gen Z consumers across other credit products, including auto loans, up 14% in 2023 as compared to the inflation-adjusted 2013 average balances.

“It’s no surprise that in this economic climate, one in which the cost of living is significantly higher relative to a decade ago, younger consumers are increasingly turning to credit products to bridge their financial needs,” said Jason Laky, executive vice president and head of financial services at TransUnion. “This is a demographic that is younger and newer to the workforce and accordingly, is likely commanding a lower salary at an earlier point in their career. As long as inflation remains elevated and the cost of goods remains so as well, balances across products such as credit cards, personal loans, and auto are likely to continue to grow.”