Young Australians moving away from credit cards: new survey
Offering alternative payment methods is more important than ever for merchants, suggests report.
Move over credit cards. A new survey has confirmed that young Australians are shifting away from credit cards at an unprecedented rate.
The survey, conducted by Morning Consult for Afterpay, surveyed 20,000 people worldwide and found that young Australians are rejecting credit cards faster than anywhere in the world. More than half (56%) of Australian Gen Zs claim that credit cards give them “the ick.”
The report, ‘Why Credit Cards Give Gen Z the Ick,’ offers a deep dive into the evolving financial attitudes of Australian consumers. It also provides businesses with fresh insights into how consumers are spending and saving.
Key takeaways for merchants
Credit cards are on the decline among young consumers
Buy Now, Pay Later (BNPL) is on the rise, with Australian adults of all ages open to using it in future
Nearly half of Gen Z will abandon a purchase if their preferred payment method isn’t available
Consumers are watching what they spend – and how they spend
As the cost-of-living crisis continues, many Australians are thinking carefully about their spending, with 85 percent of Australians using budgets to manage their spending, according to the report.
However, consumers are not only evaluating what they’re spending, they’re also examining the way they pay, and assessing the benefits and drawbacks of different payment methods.
Financial stress is high – especially among Gen Z
The report discovered that many Australians have limited financial flexibility; nearly a third have less than $800 saved for emergencies. This is particularly true for Gen Z, with nearly two-fifths (38%) reporting that they have less than $800 saved up.
Liquidity is king. Credit cards are in decline
Cash and debit cards emerged as the most popular payment methods across all age groups. However, credit card usage falls sharply among younger age groups. While 59 percent of Boomers use credit cards, that drops to 27 percent for Gen Z. In fact, Gen Z is the group that is most open to alternative payment methods like BNPL.
The report found that far from alleviating financial stress, credit cards are more likely to exacerbate it, with six out of seven Australians (84%) agreeing that credit cards can be financially dangerous and three quarters (76%) of Gen Z reporting that credit card bills make them feel “anxious” or “stressed.” Many young consumers (63%) also admit that they don’t fully understand credit card terms and conditions.
BNPL on the rise
By comparison, alternative payment methods are becoming more popular, with 53 percent of Australian adults open to using BNPL in the future. This rises to 59 percent among Gen Zs.
Women are especially open to using BNPL (55%). So, too, are adults with higher incomes (57%), suggesting that many consumers might use BNPL to manage their spending more flexibly, not because they are lacking in funds.
Australians are loyal to their payment method
The survey found that Australians are loyal to their preferred payment methods – so loyal that more than half (56%) would rather abandon a purchase than use an alternative when merchants don’t accept their first choice.
The bottom line for merchants? It is increasingly important for businesses to not only offer an array of payment options but also understand how their target audience prefers to pay.
You can read the full report here.
All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.
*Source: All statistics sourced from Why Credit Cards Give Gen Z the Ick, Morning Consult, 2025
Categories