“I would never put rent on my credit card,” said Em, a 26-year-old in Boston who is trying to pay off credit card debt she’s had for about a year and asked not to be identified by her full name. “I’m not sure I’d feel comfortable — or to be honest, trust myself — to try this tactic.” She lives paycheck to paycheck and worries she would forget to pay her card one month or fail to put aside that portion of her paychecks if her rent went onto a credit card. “It seems like a rabbit hole just waiting for me to fall into,” Em said.
“Credit card companies make money on people who don’t pay their bills on time,” Lamarre said. “People who are responsible with credit cards, like me and my friends, at least get to be rewarded by using the cards responsibly. … It’s not something I control, that people aren’t responsible with it, but I try to tell people how to work within the system and not be a victim to it.”
The average credit card balance among Gen Z consumers last year was $2,854, according to Experian. LendingTree’s Channel expects Gen Z consumers’ credit card use will increase as they age, as millennial consumers’ did. Many are still not completely financially independent. When the pause on student loan payments is lifted, and more Gen Z adults age out of restrictions that make it harder for people under age 21 to get a credit card, their reliance on this form of debt will likely rise.
As credit card companies develop new incentives, Channel encouraged caution. “I definitely would not advocate Gen Z, or really anyone else, to go out and say, ‘Gee whiz, I’ve got to start making my car payment with my credit card now, because I’ll get more points,’” Channel said. “It’ll probably not work out very well for most people.” ●
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