Trend: Gen Z Navigates Credit Markets with Confidence

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Last updated on August 23rd, 2023

Despite recent economic changes like inflation and the tightening of underwriting by lenders, Gen Z continues to navigate the markets confidently. According to a new TransUnion report, Gen Z is displaying maturity in navigating the credit markets and proving upward changes year-over-year (YoY.) Here’s what you need to know.

Gen Z Trends Exhibit Financial Confidence in the Credit Market

The TransUnion Consumer Pulse Study US Q2 2023 found that over half of Americans (57%) feel confident about their household finances. Out of those feeling optimistic, 51% feel this way because they expect an income increase in the next 12 months – leading the pack are the Millenials at 68% and Gen Z at 66%. Compared to the older generation, 46% of Gen X and 27% of Baby Boomers feel the same way. However, Gen Z shows the most overall optimism regardless of income increases. Gen Z (73%) and Millenials (69%) felt the most optimistic when compared to Gen X (51%) and Baby Boomers (41%).

Roughly a third (32%) of consumers have plans to apply for new credit or refinance existing credit. Among the various types of credit products, 53% of consumers planned to use credit cards, and 27% looked forward to using personal loans. Although inflation impacts the pockets of many Americans, Baby Boomers (30%) and Gen X (30%) deem inflation as one of their top financial concerns. In comparison, nearly a quarter (26%) of Millenials and 14% of Gen Z considers inflation a top concern.

A Lack of Concern for Inflation

Gen Z’s lack of concern with inflation may stem from the absence of experience. Many of the other generations lived through a period of financial crisis like inflation or a recession. Today, the oldest Gen Zer is 28 years old (born between 1995 – 2005), meaning that during the Great Recession of 2008, they were about 13 years of age. While the 2008 recession may have indirectly affected Gen Z, their older siblings, and parents may have fresh memory of their finances during this time.

Nonetheless, Gen Z (98%) recognizes the importance of credit, followed by 96% of Millenials, 91% of Gen X, and 74% of Baby Boomers. However, only 35% of Gen Z agreed they have adequate access to credit. In comparison, 54% of Millenials, 51% of Gen X, and 70% of Baby Boomers feel they have sufficient access.

Due to Gen Z’s newer credit history, it’s possible they may have limited access to credit. In contrast, the other generations have had some time to establish positive credit. As a result, lenders and card issuers most likely see mature credit reports as less of a risk when approving loans.

Gen Z’s Financial Plan for Credit

Either way, Gen Z is ready to navigate the credit markets, as the report found 50% of Gen Z consumers have plans to apply for new credit or refinance existing debt like student loans, car loans/leases, and more. To compare, 32% of the entire population have plans to take action on new credit cards and personal loans.

“It makes sense to see Gen Z consumers’ use of credit cards and personal loans increase relative to consumers as a whole as they age into financial independence,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion. “Like the overall population, many Gen Z borrowers are facing the same financial challenges brought on by high-interest rates and inflation. As a result, they are tapping into these available credit products to help them cope with rising expenses and the tightening of their monthly budgets.”

Related Article: Fight Inflation with Cash Back Credit Cards

Featured image by Davide Zanin Photography/ Canva

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About: Jeannyn Gomez
Jeannyn Gomez

Jeannyn is the Content Management Assistant for In addition to serving on all aspects of social media and spreading the word on expert credit and personal finance advice, Jeannyn finds herself on quests for humor, supernatural phenomena, and conspiracy theories for fun.

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