The days of young consumers swiping their credit cards without a second thought may be numbered. A new report from Cash App Afterpay, conducted by Morning Consult, reveals that nearly two-thirds (63%) of Gen Z are turning away from credit cards, citing hidden fees, high interest rates, and financial stress as dealbreakers. Instead, they’re embracing alternatives like debit cards and Buy Now, Pay Later (BNPL) services.
Credit cards are quickly becoming a financial red flag for younger consumers. The study found that 68% of Gen Z experience stress and anxiety over credit card bills, while more than half (51%) openly admit that credit cards give them the “ick.” Further, 53% of Gen Z credit card users said they’re often caught off guard by interest fees, making financial planning more difficult.
The study also emphasises a broader struggle with financial literacy, with only 72% of Gen Z expressing confidence in managing their personal finances, compared to 92% of Boomers. This knowledge gap has made them more cautious, pushing them toward payment options that feel more transparent and manageable.
BNPL and debit takeover
Faced with rising frustration over credit cards, young consumers are pivoting to alternatives that offer more control. Debit cards remain the most popular payment method, used by 70% of Americans, while structured BNPL services are gaining significant traction. The report found that 52% of Gen Z believe BNPL helps them manage their money better than traditional credit, and 55% are open to using it in the future.
BNPL solutions like Cash App Afterpay offer a more predictable way to pay, with real-time underwriting, clear payment schedules, and no compounding interest—features that resonate with Gen Z’s demand for financial clarity.
Flexibility over fees
As Gen Z’s spending power grows, their influence over the financial industry is becoming impossible to ignore. They’re rejecting outdated credit models riddled with hidden fees and instead gravitating toward payment solutions that prioritise transparency, flexibility, and financial well-being.
The next generation of consumers isn’t just looking for convenience; they want financial tools that empower them to spend smarter and stress less. And if the “ick” factor surrounding credit cards continues to rise, the industry may have no choice but to adapt.