Millennials and Gen Z consumers are the largest group to use buy now, pay later services and credit cards to manage purchasing costs, according to recent research.
06/28/2023 2:45 P.M.
2 minute read
According to a recent PYMNTS study released June 1, 83% of consumers made payments for credit products in the three months before.
Overall, Gen Z consumers utilize credit less frequently than Millennials, but both Millennial and Gen Z consumers are most likely to have expanded their use of credit products during the past year than members of any other generation, according to the study.
Among Millennial and Gen Z demographics, their credit card and BNPL uses have the most comparable dollar values on average. The fact that these products are comparable suggests that these consumers utilize them more interchangeably. However, other consumers mainly use BNPL to pay for expensive purchases. Twenty percent of Millennials who participated in the survey had used BNPL in the three months before. Only 5.9% of seniors and Baby Boomers took the same action.
Additional findings from the research include:
- While 47% of credit card holders cite rewards as a reason they use the method, just 24% of BNPL users cite this as an incentive.
- More than half of younger consumers use credit for everyday purchases as a way to better manage their cash flows.
- Just 38% of baby boomers and seniors said the same. Leading all generations, 42% of Millennials increased their use of credit products for everyday purchases in the last year. Gen Z was next at 30%.
- Millennial and Generation X consumers are the most likely age groups to use credit products other than cards.
- Fifty-five percent of all consumers now revolve their credit card balances, including those with installment plans linked to cards.
- While 45% of all cardholders say they pay off credit card balances every month, one-third say they rarely or never pay balances in full.
- Baby Boomers and seniors are the most likely to pay credit card balances in full, with half saying they do so every month.
- Thirty-eight percent of all cardholders have installment programs or payments pending on their credit cards, compared to 59% of Millennials and 45% of Gen Z consumers.
The report, The Credit Economy: How Younger Consumers Make Credit Decisions, a collaboration with i2c, surveyed 3,396 consumers between March 16 and 21, 2023, to explore what drives consumer interest in using credit cards and BNPL for everyday and occasional purchases across generations.
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