The news: Gen Zers are opening and utilizing credit cards at a similar rate to millennials, per a FICO report.

Over the course of the past 12 months, 25% of Gen Zers opened at least one credit card account—a larger share than any other generation. This suggests that while this cohort grew up with a wide availability of fintech offerings, traditional credit’s pull has not lost its power. 

How we got here: For one, Gen Zers have aged into qualifying for traditional credit. With the eldest Gen Zers at 29, the upper echelons of this generational cohort have both the work history and credit history from rentals, student loans, and starter secured cards to qualify for more and better credit cards. 

This cohort could also benefit from a gradual loosening of banks’ underwriting—for the first time since Q3 2022, the net percent of banks tightening credit card lending standards was 0%, per the Federal Reserve’s Q1 senior loan officer survey. 

Why this matters: Fintechs have prioritized targeting Gen Zers and Alpha consumers. Cash App is making a preteen push, and Venmo launched a campaign to draw in college students. 

However, despite fintechs’ significant investment to capture this age group, Gen Z’s adoption of credit cards suggests the payment methods’ enduring importance, even as under-29-year-olds hold suspicion of revolving credit and preferences for debt payments.

Implications for issuers: Issuers should emphasize their unique benefits to secure Gen Z’s loyalty, such as their established record of trust and wider portfolio of rewards unmatched by fintech newcomers. 

Adding budgeting features and reminders can simulate the perceived safety of debit cards to prevent overspending. Once young consumers understand the strategy and benefits of credit card ownership—building credit, earning travel points and cash back, and post-purchase card-linked installment opportunities—issuers can lock in loyalty.