Gen Z is opening credit card accounts at higher rates than any other generation, according to a new report from credit scorer FICO.<\/p>\n
More than 25% of Gen Z adults between 18 and 29 with a FICO Score opened at least one credit card in the past year \u2014 the highest rate of any age group, according to the data.<\/p>\n
What\u2019s behind the plastic grab? Bills to pay.<\/p>\n
\u201cWhen faced with job loss or income reduction over the past 12 months, 48% of Gen Z and 43% of millennials relied on credit cards to make ends meet, compared to 25% of Gen X and just 7% of baby boomers,\u201d according to\u00a0FICO vice president Jenelle Dito.<\/p>\n
All told, nearly 4 in 10 Gen Zers said they\u2019re opening cards to have a financial cushion.<\/p>\n
Learn more about <\/em>high-yield savings accounts<\/em>,\u00a0<\/em>money market accounts<\/em>, and\u00a0<\/em>CD accounts<\/em>.<\/em><\/p>\n This dovetails with the squeeze Gen Zers are facing. More than 6 in 10 of the oldest Gen Zers said earlier this year that they had stopped or reduced their retirement savings in the past several months, a separate study found.<\/p>\n Two-thirds of these Gen Z folks added that they hadn\u2019t been able to contribute to savings as much as they\u2019d like because of other demands.<\/p>\n There are some glimmers, however, Fidelity said 34% of IRA accounts owned by Gen Z had a contribution between Jan. 1 and March 20, compared with 20% of accounts owned by millennials and 13% for Generation X.<\/p>\n All the while, their credit scores are plunging. As of late 2025, Gen Z has the lowest average credit score among all age cohorts at 678, a three-point drop from the previous year and well below the national average of 714, placing them in the \u201ccompetent\u201d to \u201cfair\u201d range.<\/p>\n FICO scores are a series of three-digit numbers ranging from 300 to 850 based on an individual\u2019s spending and debt. A high FICO credit score is typically considered 740 and up, which lenders view as low risk. Scores from 740 to 799 are rated as \u201cvery good,\u201d while scores of 800 or above are classified as \u201cexceptional.\u201d<\/p>\n Read more: <\/em>This map highlights the average credit score in every state<\/em><\/p>\n \u201cThe resumption of required student loan payments has nudged the average score slightly lower,\u201d said Ethan Dornhelm, head of scores analytics at FICO.<\/p>\n Nearly one-third, or 7.1 million, of student loan borrowers who had a payment saw a new delinquency reported on their credit file, per FICO\u2019s research. That pushed their credit scores, on average, down 62 points since January 2025.<\/p>\n Have a question about retirement? Personal finances? Anything career-related? Click here to drop Kerry Hannon a note.<\/em><\/strong><\/p>\n\n If you\u2019re getting by on an entry-level salary, plus struggling with student loan and credit card debt, it can feel crushing.\u00a0 Last year, for example, Gen Z consumers, most of whom are in their 20s, carried an average credit card balance of $3,493, according to Experian data.<\/p>\n<\/p><\/div>\n Read more: <\/em>How to check your credit score for free<\/em><\/p>\n \u201cWhen someone in this age range doesn\u2019t have a lot of cushion in their monthly cash flow and they get either a little bit behind, or salary increases are not keeping up with the cost of living, it\u2019s easy to see how this happens,\u201d J. Victor Conrad, a certified financial planner and founder of Pinnacle Financial Strategies, in Wexford, Pa., told Yahoo Finance.<\/p>\n Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “<\/em>Retirement Bites: A Gen X Guide to Securing Your Financial Future,<\/em>” “<\/em>In Control at 50+: How to Succeed in the New World of Work<\/em>,” and “Never Too Old to Get Rich.” Follow her on <\/em>Bluesky<\/em> and <\/em>X<\/em>.<\/em><\/p>\n![\"\"](\"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/DG7dOpnKFeCiGgaqWyyijg--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY0MA--\/https:\/\/d29szjachogqwa.cloudfront.net\/images\/2026-04\/4cabea2e-6f24-4c80-801e-248d42111078\")