Most Gen Zs say credit cards give them the ‘ick’, as study reveals more Aussies ditching credit cards

• 56% of Gen Z report that credit cards give them “the ick” – the highest rate globally

• 84% of Australians consider credit cards “financially dangerous”

• 57% of previous credit card holders have already abandoned them for alternatives

• 76% of Gen Z experience anxiety or stress from credit card bills

DISTRIBUTED-WORK-MODEL/SYDNEY — 23 April, 2025: New research from leading buy-now-pay-later (BNPL) platform Afterpay, reveals an unprecedented rejection of credit cards among young Australians, with new data showing a seismic shift as younger generations abandon traditional credit in favour of more transparent payment alternatives like  Buy Now, Pay Later (BNPL).

The ‘Why Credit Cards Give Gen Z the Ick’ report, conducted by Morning Consult, offers a deep dive into the evolving financial behaviours of Australian consumers. The report surveyed 20,000 people worldwide, including more than 4,300 Australians, uncovering a dramatic shift in payment preferences that signals the potential end of credit cards’ dominance among younger generations, alongside a rising preference for debit cards and BNPL.

Financial stress is high – especially among Gen Z

Amid the current cost-of-living crisis, many consumers are struggling to manage their finances, according to the report. Although at least four in five Australians create budgets to manage their shopping expenses, three-quarters find it difficult to stick to them.

 The challenge is particularly acute for Gen Z, with nearly four in 10 (38%) saying they have less than $800 saved up to cover an emergency expense. For Gen Z women nearly half (47%) are unable to cover an $800 emergency expense, compared to 27% of Gen Z men.

 Credit cards: A source of anxiety 

Credit cards do little to alleviate financial stress – and in fact, for many Australians, they create it. Six out of seven Australians (84%) agree that using credit cards can be financially dangerous, and more than three-quarters of Gen Z (76%) say credit card bills make them feel anxious or stressed.

For some younger consumers, this comes down to high interest rates, with half (50%) of Millennials and 39% of Gen Z saying they’ve been surprised by the amount of interest they pay on their bills. Meanwhile 63% of Gen Z have trouble fully understanding credit card terms. For others, the issue is mounting debt, with more than one in five Gen Zs owing $8,000 or more in credit card debt.

 The ‘ick’ factor with credit cards: A generational shift

Consumer sentiment around credit cards is shifting, with three in 10 Australians reporting that their view of credit cards has become more negative in the past 12 months.

Meanwhile, more than half (56%) of Gen Z say that credit cards give them the ‘ick’. This was the highest rate among all global respondents in the United States, Canada, the UK and New Zealand.

Australians are opting for debit and BNPL over credit cards

As dissatisfaction with credit cards grows, consumers are actively seeking out alternative payment methods that offer more transparency and control.

Debit cards are the most common form of payment among Gen Z (75%) and Millennials (76%), followed by cash and bank transfers. Credit cards were the least used payment methods for younger consumers.

According to the report, almost three in five Australians (57%) who have owned a credit card have switched to another payment method.

 Meanwhile, BNPL solutions, such as Afterpay, are becoming increasingly popular, especially among younger consumers. The report found that more than half of all Australians (53%) are open to using BNPL in the future, and that more than a third of Gen Z, Gen Z and Millennials BNPL users already use it at least once a week.

The future of payments: choice, control and financial wellbeing

The findings from ‘Why Credit Cards Give Gen Z the Ick’ underscore a broader shift towards financial tools that prioritise transparency, accessibility and flexibility.

 Consumers are re-evaluating their relationship with traditional forms of credit, seeking payment methods that empower them to manage their finances without the burden of emotional stress.

 Afterpay is at the forefront of this shift, offering a transparent way to pay, without the stress of compounding interest rates and opaque terms and conditions. Afterpay’s pay-over-time model gives customers control over their spending and enables them to manage their spending on their terms, and ultimately take charge of their own financial future.

 Click HERE to access the full report.