What's Happening?
Gen Z consumers are increasingly using credit cards to manage expenses, with a focus on groceries, rent, and dining out. The Blue Cash Preferred® Card from American Express offers 6% cash back on groceries, while the Bilt Mastercard® provides rewards for rent payments without transaction fees. The American Express® Gold Card offers 4X points on dining. These cards help Gen Z offset rising living costs by maximizing rewards on everyday expenses.
Why It's Important?
As living costs rise, Gen Z is turning to credit cards to earn rewards and manage expenses. This trend highlights the importance of financial literacy and the strategic use of credit to maximize benefits. Credit card companies benefit from increased usage and loyalty among younger consumers. However, there is a risk of accruing debt if balances are not managed responsibly. Financial institutions may need to offer educational resources to help Gen Z use credit wisely.
What's Next?
Credit card companies may continue to tailor products to meet the spending habits of Gen Z, focusing on categories like groceries and dining. Financial education initiatives could become more prevalent to ensure responsible credit use. Gen Z consumers might explore additional financial products, such as savings accounts or investment options, to complement their credit card strategies.
