Skip to main content

Credit Cards Decline as Millennials and Gen Z are Bucking the Trend

By 3 June 2021March 26th, 2023No Comments

Over the last decade, new credit card applications are declining in Australia. Millennials and Gen Z consumers prefer to use debit cards instead of credit cards, and there’s reasons for this.

In Australia, new credit card applications are declining in favour of debit cards. In the last decade, there has been an 18% decrease on credit card applications. While Millennials have tried credit cards; Gen Z just aren’t that interested. In the last 14 years, millennials using credit cards has fallen from 58% to 42%. Millennials and Gen Z consumers are bucking the trend of using credit cards and there are plenty of reasons why they’re turning away from this. Their payment choices are impacted by many factors, including Covid-19, jumping on to new trends like Buy Now, Pay Later (BNPL), the launch of PayID and real-time account-to-account payments.

Mobile banking apps, e-wallets and cardless payments

Millennials and Gen Z are big users of digital payments. 93% of millennials and 98% of Gen Z own smartphones. The use of cardless cash withdrawals, contactless payments, e-wallets and mobile banking apps have become popular. It’s all about the convenience. Think of split purchases with friends, or using banking apps to work out budgets, create saving goals and more.

Avoid being in a pile of debt

If misused, credit cards can result in overspending but research indicates that the older generations end up spending more money with credit cards resulting in high fees and interest rates. It’s well proven that they end up spending more than they would with cash, leading to long-term ‘bad debt’ that they struggle to pay down. Younger generations avoid being in this situation as much as they can.


Millennials and Gen Z prefer debit cards, while older generations opt for credit cards. As HELP (Higher Education Loan Program) debt and affordability stress increases, this group are becoming more budget-conscious and focused on looking at other ways to manage their cash outflows. Payment options such as Buy Now, Pay Later (BNPL) and real-time payments are preferred payment methods, allowing consumers to be in control of their spending.

Financial well-being at stake

The pandemic has greatly impacted millennials and Gen Z income and spending habits. They have either lost their jobs or have been placed on temporary unpaid leave. According to Deloitte’s Millennial and Gen Z Mental Health Survey, a large number of millennial and Gen Z workers were suffering from stress and anxiety even before the pandemic and revealed that 48% of Gen Z and 44% of millennials said they feel anxious or stressed all or most of the time. Job insecurity and uncertainty around income are primary causes for this uneasiness.

Credit card scams and fraud

Counterfeit, Card Not Present (CNP), skimming, lost or stolen cards. Do these all sound familiar? Credit card fraud is still a problem in Australia.

According to Australian Payments Network (AusPayNet) statistics, CNP transactions accounted for 87% of card fraud in 2019, totalling $464 million, and remains vigilant as online shopping continues to increase during the pandemic.

Millennials and Gen Z are tech savvy digital natives looking for experiences that are on-demand, real-time and at their fingertips. Azupay is well suited for these cohorts by providing an account-to-account payment option that is the closest thing to cash, protecting consumers and businesses from fraud and chargebacks.

As real-time payments grow in adoption, it is important for businesses to consider this future-proof payment option and focus on delighting their consumers.