Credit Sesame assess the financial literacy of younger generations


There is a complicated love affair between Gen Z and credit according to financial wellness company Credit Sesame. It has been assessing the financial literacy and well-being of younger generations. In particular, it has been researching their understanding of credit and other personal finance matters.

According to its research, 92% of Gen Z prioritises a credit score of 750 or higher over the allure of tens of thousands of social media followers. This shift in priorities challenges preconceptions. It paints a portrait of a generation that understands the impact of a robust credit history on their financial well-being.

Credit Sesame reveals that 66% of respondents believe that their credit score is a good measure of their financial health.

One-third believe that age-old myth that checking your credit score will affect it. And 19% couldn’t correctly match the definitions of debit and credit. Some 42% of respondents would rate their understanding of how credit scores work as “average to poor.”

Credit Sesame research-other findings

  • 82% of respondents admit they struggle to keep up with their friends’ saving and spending habits (35% of millennials struggle “very much” vs only 24% of Gen Zers)
  • Credit card debt is impacting younger Americans’ larger goals, such as buying a house (35%), taking a dream vacation (29%) and saving for retirement (28%).
  • 44% of respondents said they would leave their bank due to poor customer service, compared to only 15% for failure to reduce their carbon footprint.

The study also underlines the difference between the two generations surveyed. Millennials report opening their first bank accounts at 21 plus applying for their first credit cards and starting to pay rent around the age of 23. Meanwhile, Gen Z respondents started opening bank accounts and credit cards earlier, at 19 and 20, respectively.

US Gen Z: 1-in-10 have no credit card or credit score

Some 28% of Gen Z respondents “always” or “often” feel judged when using cash to pay. More than a third of millennials share the same sentiment.

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“In this survey, we unearthed a remarkable truth. The perceived stereotypes of young people and their approach to their credit and finances stands debunked,” said Adrian Nazari, Founder and Chief Executive Officer of Credit Sesame.

“They comprehend that a strong credit history is the linchpin of financial wellness. But they lack the education to make more informed choices. Like the 80% of Gen Z and millennials who feel their debt is preventing them from owning homes, saving for retirement, and having children. The findings from this study underscore Credit Sesame’s mission. To provide free access, education, and tools to everyone to improve their credit and financial health.”


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2024-02-23 08:14:15

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