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Generation Z stands apart from previous generations in a variety of ways. That includes their clear preferences and habits when it comes to finances and spending trends.

A young Gen Z woman with colored hair spends money online with her credit card and phone

Generation Z is the youngest age group reasonably able to make their own purchases. They’re also known as the iGeneration because they’ve practically spent their entire lives with technology in their hands. Now Gen Z is in the limelight for developing their own spending habits compared to previous generations like millennials and Gen X. As Gen Z grows older and makes more buying decisions, brands will be paying even more attention to what drives their choices.

How Do Gen Z Money Habits Differ from Past Generations?

Trends and styles change by the decade, and the one you grew up in influences a lot of your future decisions. That creates some clear generational patterns of habits and preferences. So breaking up the population into specific groups based on age is a good way to recognize and identify trends.

Most consumers fall under these five age groups:

  • The silent generation (born 1928 – 1945)
  • Baby boomers (born 1946 – 1964)
  • Generation X (born 1965 – 1980)
  • Generation Y or millennials (born 1981 – 1996)
  • Generation Z (born 1997 – 2012)

Millennials and Gen Z have some overlapping habits and attitudes. But one big difference is that Gen Zers view cryptocurrency as being safer than stocks, while millennials think crypto is the riskiest investment option. Regardless of which belief is correct, Gen Z tends to be more financially conservative overall than previous generations. They save more for retirement than their predecessors and seek financial planning advice more often than millennials (64% vs 62%, despite being 15 years younger).

This cautious mindset might stem from the fact that Gen Z grew up in the midst of major recessions and a global pandemic. No generation since the silent generation — many of whom were kids during the Great Depression — has had this type of unrest during their formative years.

Credit Card Use

Everybody has things they look for in a financial product, but Gen Z prefers cash back credit cards. Especially if they come with no annual fee, which is a perk often reserved for better credit scores. While Gen Z consumers usually aren’t there yet, building credit is their number one reason for getting a credit card. Otherwise they’ll happily go with debit.

Less Time to Establish Credit

When you become old enough to get a credit card — which is between 18 and 21 years old — you usually have zero credit history. Since Gen Z falls into this age range, their credit scores usually aren’t very strong. Like many people starting out, they may have to go with a secured card or student card for a few years.

Building credit from scratch takes a few important habits — making small purchases and then paying them off immediately is one of the best strategies. The goal is to use the credit card, but not enough to max it out. Having a credit utilization ratio of 30% or less is optimal. Then paying it off each month before the due date quickly establishes good payment history. And that’s one of the most important factors of a good credit score.

Reliance on Non-Traditional Banking

Baby boomers overwhelmingly prefer dealing with traditional brick-and-mortar financial institutions. Likewise, nearly half of Gen X wants a bank or credit union with physical branches — even if they never use them. But Gen Z is the opposite. As digital natives, almost 60% prefer opening an account online or through a mobile app. Millennials are similarly attracted to digital banking, and 85% would use a non-traditional bank. These attitudes probably begin with how we all had our first banking experiences in childhood. And millennials were the first generation to grow up with plenty of access to computers and other technology.

Of course, embracing the digital world extends to new financial technology. So over half of Gen Z banking consumers have invested in cryptocurrencies, whether directly or through a crypto-based fund. But their focus on digital doesn’t prevent this generation from connecting with people — in fact, social issues are extremely important to them. 58% say they would ditch their financial institution for one that’s more supportive of diversity, equity and inclusion (DEI) issues. And 56% would make the leap for one that’s more devoted to environmental, social and governance (ESG) concerns.

Supporting Socially Responsible Businesses

Gen Z’s focus on DEI and ESG issues goes beyond financial institutions. Caring about social responsibility also means they overwhelmingly choose to spend money with businesses that support eco-friendly policies and human rights. But they have to be real — donating to an environmental charity while pouring toxic waste into the local water system doesn’t count. In fact, there’s a term for that: greenwashing. And Gen Z sees right through it.

Shopping Online vs. Brick and Mortar

Gen Z and millennials both prefer shopping online over going to physical locations, and the pandemic encouraged this trend even more. Both age groups say convenience and the ability to do price comparisons are the biggest benefits of e-commerce.

At the same time, many Gen Zers want to support locally owned small businesses, which often means shopping in brick-and-mortar stores. In this way, they have more in common with boomers than the generations in between. Of course, Gen Z is very vocal about choosing brands that align with their values.


While many in this generation are still too young to buy real estate, the number of Gen Z homeowners increases each year. As of early 2023, Gen Z made up 4% of homebuyers. And 30% of them moved straight from a family home into their own, according to a report on generational trends from the National Association of Realtors (NAR). This compares to 28% of homebuyers being millennials, 24% Gen X, and a whopping 39% being boomers — the largest generational group of buyers for the first time.

And yet, Gen Z certainly plans to get there. 45% of Gen Zers from 18 to 24 years old want to become homeowners within the next five years. Even more impressive, they’re prepared to work hard in pursuit of their goals. 75% of Gen Z are actively saving for the future, with 10% putting savings towards a house down payment and 20% building an emergency fund.


Education is important to Gen Z, but not always in the same way millennials and Gen X looked at it. 62% of recent high school graduates aged 16 to 24 were enrolled in colleges or universities in October 2022. And more than 90% of them were attending full-time, according to the U.S. Bureau of Labor Statistics. This number has declined slightly from previous years, but it still means that the majority of Gen Z are seeking post-secondary education. And that also means they are likely taking out student loans.

However, members of Gen Z are also open to less expensive non-traditional educational paths. They often choose to learn through online courses, certificate programs, community colleges or trade schools. This reflects the generation’s overall hesitation to take on unnecessary debt. It also demonstrates their eagerness to take the shortest route to a good-paying career, which often includes learning on the job.

Takeaways on Gen Z Spending

Trends come and go, and patterns tend to form by the generation. Gen Z is no exception, and its young members have their own values, goals and expectations in life.

  • Gen Z is more financially conservative than the previous few generations. They tend to save more for the future, including retirement and home buying.
  • Gen Z values learning but doesn’t necessarily feel the need to follow a traditional post-secondary education path.
  • Gen Z seeks the shortest, least expensive route to a good-paying job or career.
  • While members of Gen Z are less likely to have their own credit card, they’re more responsible when they do.
  • Gen Zers are more socially conscious and environmentally aware than previous generations, and more likely to support socially responsible businesses.
  • Gen Z prefers online shopping for its convenience, ease of access, and ability to compare prices. But it also wants to support small and local businesses.

It might seem surreal to be looking at the spending trends of a generation this young. After all, Gen Z still has members working their way through middle and high school. But enough of them have reached the age of majority that their preferences and attitudes are abundantly clear. In the future, we’ll see even more how this generation stacks up against its older siblings, parents and grandparents.


If you’re starting your own financial journey and need a credit card to help build credit history, see if you pre-qualify for an offering from Credit One Bank, with no impact on your credit score.

About the author:

Heather Vale

For over a quarter of a century, Heather has been working as a journalist in all media: TV, radio, print, and online. After establishing her career in Toronto, she has been living, working, and playing in Las Vegas for the past decade. She loves pulling apart complicated topics to make them simple, fun, and easy to understand, especially in the business and financial niches. But she also enjoys writing about the personal side of life, including success, relationships, families, and pets. She approaches everything from a yin-yang perspective, so her passion for wordplay and entertaining metaphors is always balanced with an intense (and some would say annoying) focus on facts and accuracy.

This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.