Gen Z is rejecting this one staple out of fear it will ruin their future

One staple of the past is being flat out rejected by Gen Z Aussies who fear it will jeopardise their financial future.

Gen Z is rewriting the rules of money and one old-school essential hasn’t made the cut.

Credit cards are officially out as young Aussies opt for buy now, pay later alternatives and a more manageable financial slate.

Queenslander Nat fell into the credit card trap as a young person, and before long had accrued thousands in debt and feared it would seriously impact her financial future.

“It was really scary because it had massive amounts of fees and I was so nervous about not paying it on time and ruining my chances of being able to buy a house,” the 24-year-old, who originally got a credit card to buy a laptop for uni, told news.com.au.

“I just found that it kept accruing interest and I was trying to pay it off, but it felt like a massive weight on my shoulders and it wasn’t pleasant.”

Gen Z is rejecting this one staple out of fear it will ruin their future. Picture: Supplied

Nat managed to pay her credit card off fully a few years back, and ultimately completely swore them off in favour of buy now, pay later alternative Afterpay.

“It just felt like such a slippery slope that I was really terrified of falling into,” she said.

Even though she got the credit card to pay for her laptop, she very much felt the temptation to use it on holidays and other discretionary items like clothes.

“But then I saw the amount of interest I had to pay and thought, ‘actually, no’.”

“I was so worried that I was going to have so much debt and end up in a situation where I wasn’t able to pay it off, and as a 22-year-old have debt collectors at my door,” she said.

As she wrestled with the “ridiculous” interest payments, she was left confused at why credit cards were such a common factor in people’s lives.

“I’m not understanding why everyone has credit cards when it comes with so much cost,” she said.

Nat recalled the way an ex-boyfriend used his credit card to live beyond his means to a point where his maximum repayment capacity could only barely cover the interest.

Nat has sworn off credit cards. Picture: Supplied

She feared debt credit card debt could ruin her future. Picture: Supplied

“He was paying hundreds a month off but it wasn’t even taking the balance down,” she said.

“I think it was about $7000. It was terrifying.”

Nat can’t justify ever getting another credit card, particularly given lower risk alternatives available like Afterpay, Klarna and Zip.

“There’s no point for me to get a credit card when I can use Afterpay which doesn’t have fees and it’s split into smaller payments,” she said.

“Also credit cards let you wrack up so much debt but Afterpay has a more reasonable limit I think.”

The number of credit cards has been on a downward trend since 2018, reaching a low in April 2022.

Although there was a slight recovery in 2023, numbers declined again in mid-2024.

As of March this year, there were approximately 12.1 million credit cards in circulation in Australia, with a national debt accruing interest of $20.1 billion.

Research funded by Afterpay earlier this year found that 84 per cent of Australians considered credit cards “financially dangerous”.

Originally published as Gen Z is rejecting this one staple out of fear it will ruin their future