OAKLAND, Calif.–A new report has revealed what it calls “significant shifts” in payment preferences among younger consumers, including that 63% of Gen Z are moving away from credit cards, and that 51% say credit cards give them the “ick.”
The findings of the survey, which is titled “Why Credit Cards Give Gen Z The Ick Report,” byCash App Afterpay, also include that:
- 82% of Americans believe credit cards can be financially dangerous
- 68% of Gen Z report stress and anxiety from credit card bills
- 40% of credit card users are frequently surprised by interest fees, rising to 53% for Gen Z.
“The report demonstrates a clear trend toward alternative payment methods, with 70% of Americans preferring debit cards,” according to Cash App Afterpay. “Notably, 52% of Gen Z believe Buy Now, Pay Later (BNPL) services could help them better manage finances compared to traditional credit.”
The study also reveals that 48% of Americans are open to using BNPL in the future, including 55% of Gen Z.
Potential Bias
The company—which has an inherent bias—said its research validates the strategic rationale behind Block’s $29 billion acquisition of Afterpay in 2022. “As Gen Z’s purchasing power grows—they’re expected to become the largest consumer demographic by 2030—their payment preferences will increasingly influence industry economics,” the company said.
According to Cash App Afterpay, the report also highlights a “crucial pain point:” financial transparency.
“With 53%of Gen Z users surprised by credit card interest charges and 68% reporting financial anxiety from credit card bills, the market opportunity for alternative payment methods is substantial,” the research states. “The 55% of Gen Z open to using BNPL in the future signals continued adoption potential.”
Again, it should be noted that both companies offer BNPL financing solutions.
‘Values Shift’
The “report captures a fundamental values shift in financial services that extends beyond mere payment preferences,” the companies stated. “Gen Z’s credit card “ick” reflects a deeper rejection of financial products perceived as exploitative or lacking transparency.
“The 51% of Gen Z expressing discomfort with credit cards isn’t just about interest rates—it signals a generational demand for financial services that align with their values of transparency, control, and financial wellness,” the company continued. “What’s particularly telling is the confidence gap, with only 72% of Gen Z feeling confident in managing personal finances compared to 92% of Boomers.”
Cash App Afterpay suggested the “confidence discrepancy” creates a market opening for financial products that provide both education and guardrails.
What’s Needed for Success
According to CashApp Afterpay, the study’s findings make clear that successful products for this generation will need to incorporate:
- Upfront transparency about all costs
- Built-in mechanisms that prevent financial overextension
- Digital-first experiences with immediate feedback
- Features that build financial confidence
‘Fundamental Rethinking’
“For incumbent financial institutions, the challenge isn’t simply offering BNPL alternatives but fundamentally rethinking their approach to product transparency, fee structures, and customer education—areas where fintech competitors have gained significant advantages with younger demographics,” the organizations stated.
To access the full report, click here.
