Generation Z is opening credit card accounts at higher rates than any other generation, according to a new report from credit rating agency FICO.
More than 25% of Gen Z adults ages 18 to 29 with a FICO Score opened at least one credit card in the past year, the highest rate of any age group, according to the data.
What’s behind the plastic grip? Bills to pay.
“Facing job loss or reduced income in the past 12 months, 48% of Generation Z and 43% of millennials relied on credit cards to make ends meet, compared to 25% of Generation X and just 7% of baby boomers,” according to FICO Vice President Jenelle Dito.
In total, nearly 4 in 10 Gen Zers said they are opening cards to provide a financial cushion.
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This fits with the pressure faced by members of Generation Z. More than 6 in 10 older members of Generation Z said they had given up or reduced their retirement savings in recent months, according to an independent study.
Two-thirds of these Gen Zers added that they haven’t been able to contribute to savings as much as they would like due to other demands.
Meanwhile, their credit scores are falling. As of the end of 2025, Gen Z has the lowest average credit score among all age groups at 678, a three-point drop from the previous year and well below the national average of 714, putting them in the “proficient” to “fair” range.
FICO scores are a series of three-digit numbers ranging from 300 to 850 depending on an individual’s expenses and debt. A high FICO credit score is generally considered 740 or higher, which lenders consider low risk. Scores of 740 to 799 are classified as “very good,” while scores of 800 or higher are classified as “exceptional.”
“The resumption of required student loan payments has caused the average score to be slightly lower,” said Ethan Dornhelm, head of FICO score analysis.
Nearly a third, or 7.1 million, of student loan borrowers who had a payment had a new delinquency reported on their credit file, according to FICO research. That caused their credit scores to drop, on average, 62 points since January 2025.
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If you’re scraping by on a basic salary, plus struggling with student loans and credit card debt, it can be overwhelming. Last year, for example, Generation Z consumers, most of whom are in their 20s, had an average credit card balance of $3,493, according to data from Experian.
“When someone in this age range doesn’t have much of a cushion in their monthly cash flow and they fall behind a little bit or salary increases don’t keep up with the cost of living, it’s easy to see how this happens,” J. Victor Conrad, certified financial planner and founder of Pinnacle Financial Strategies, in Wexford, Pennsylvania, told Yahoo Finance.
