TWO IN FIVE GEN Z GET THE ‘ICK’ FROM CREDIT CARDS

• Gen Z report feeling surprised when charged credit card interest (43%)1

• Industry figures show the average credit card interest rate in the UK stands at 24.65%

• Interest-free instalments and digital wallets are fast becoming the preferred payment methods for younger consumers

DISTRIBUTED-WORK-MODEL / LONDON, 12th June – Credit cards are continuing to fall out of favour with Gen Z, with many citing feelings of confusion (60%), anxiety and stress (40%) towards traditional borrowing models.

Clearpay, a leader in Buy Now, Pay Later (BNPL), conducted a study of 4,300 UK adults to explore how younger generations are managing their finances. The research revealed that 40% of Gen Z (aged 18–28) say credit cards give them the ‘ick’, and nearly seven in ten (69%) experience nervousness when receiving their credit card statement.

Gen Z adults with current or past credit card debt report feeling stressed (40%), anxious (32%) and frustrated (27%) — the highest of any age group surveyed. More than two in five (43%) say they are regularly surprised by the amount of interest they are charged each month, and 62% admit they don’t always pay their balance in full. According to Bank of England data, the average credit card interest rate in the UK was 24.65% in January 2025, which is the highest the rate has been in more than 30 years.2 

Nearly three in five (59%) of Gen Z respondents have cancelled credit cards in favour of alternative options, with almost a third (31%) doing so more than once. While 35% believe this payment method can help build a credit history, only 9% have said they prefer to use them instead of opting for interest-free instalments.

Data shows that more than half (57%) of Gen Z are open to using Buy Now, Pay Later services in the future. Currently, Gen Z leads in frequency of use, with nearly one in five (19%) using Buy Now, Pay Later weekly or more often, compared to 13% of Millenials, 6% of Gen X and just 3% of Boomers. 

Clothing (53%) and electronics (44%) are the top categories where Gen Z say they would choose Buy Now, Pay Later, with spending trends reflecting these preferences.

Rich Bayer, UK Country Manager at Clearpay, commented: “Younger consumers are driving a fundamental change in how they want financial services providers to structure their credit products. They’re calling time on traditional interest-laden  credit, and are seeking payment methods that offer clarity, control and flexibility which empower them to manage their finances.

“At Clearpay, we’re proud to offer a solution that helps young people manage their spending responsibly, with structured payments and no interest. It’s this kind of approach that’s reshaping how the next generation chooses to engage with their money.”

ENDS

About the research

1 Morning Consult’s Afterpay Credit Card Ick Survey was conducted between February 7-February 10, 2025 among N=4,361 Adults aged 18+ in the UK. All interviews were conducted online and the data were weighted to approximate a nationally representative sample of UK Adults 18+ based on age, gender, education, and region. Results from the full survey have an overall margin of error of +/- 1%, with the margin of error greater among subgroups included in the results. 

2 Data on Average Credit Card Interest Rate (APR) 2025 which shows that according to data from the Bank of England, the average credit card interest rate in the UK was 24.65% in January 2025. Data taken from Bank of England data figures and research and data-driven personal finance site NimbleFins.

About Clearpay (Afterpay Limited)  

Clearpay is transforming the way we pay by allowing anyone to buy products immediately and pay over time – enabling simple, transparent, and responsible spending. We are on a mission to power an economy in which everyone wins. 

Clearpay is known as Afterpay outside the UK and is available in Australia, Canada, New Zealand, and the United States. It is offered by thousands of the world’s favourite retailers and used by millions of active global customers. Clearpay is a wholly owned subsidiary of Block, Inc. (NYSE: SQ).

Five facts about Clearpay: 

• The service is completely free for customers who pay on time
• If a customer misses a payment, their account is paused so that they cannot accrue more debt or fall into revolving debt
• Capped late fees apply for late payment instalments
• Globally, 90% of Clearpay transactions are made with a debit card 
• Globally, over the 12 months ended December 2023, 95% of instalments were paid on time and 98% of purchases incurred no late fees