Despite criticism over their financial habits, Experian data reveals that millennials and Gen Zs are proactively looking for the ways in which they can improve their financial health amidst the rising cost of living
Millennials made up the largest proportion of searches for debt consolidation, cash back and balance transfer cards between April to October this year, proving they have their priorities in order
Meanwhile, Gen Zs are recognising the significance of a good credit score with credit builder cards the most popular product amongst this age group
London, 1st Nov 2023: Whilst millennials have often been labelled by older generations as prioritising avocado toast and takeaway coffees, new data released today by Experian reveals that this generation are the savviest when it comes to managing their money.
Millennials (those aged between 27 and 42) accounted for 51% of all searches for credit between April to October this year. Over half of these searches (55%) were for credit cards, with debt consolidation the most popular product (19%) as millennials look for the ways in which they’re able to reduce interest rates, lower payments and have the breathing room to get out of debt faster.
This age group also made up the largest proportion of searches for both cashback and balance transfer cards. On the flipside, only 8% of baby boomers with active credit cards have searched for the same debt consolidation products in the same period, suggesting that perhaps they shouldn’t be so quick to judge the younger generations.
Meanwhile Gen Z’s (those up to the age of 26) made up 13% of all searches for credit between April to October, with the most popular product for this age group being credit builder cards (14%). This age group are often deemed to be ‘credit invisible’ as they may not have used credit previously or had any bills in their name. Having no or a low credit score could affect their ability to borrow and determine the interest rates they may receive from lenders, whereas a higher credit score can open the door to more favorable deals.
James Jones, Head of Consumer Affairs at Experian, says: “2023 has been a tough year for many and there is still some distance to go before things improve. The younger generations have recognised this and have taken action into their own hands by looking for the ways in which they can build their credit score, consolidate debt, lower repayments and make their money go further, through the likes of credit-builder and cash-back cards.
These generations need to be given more recognition. Taking the necessary steps towards good money management can feel overwhelming, causing people to sometimes ignore the problem.
Our data suggests that younger generations are educating themselves on the small steps that can go a long way to improving their financial health. These changes can positively impact your credit score, meaning you’ll be eligible for better deals on products like cards, mortgages, and loans.”
James Jones provides his five top tips for how to improve your financial health:
1. Engage with your credit score
A credit score can impact everything from your eligibility to your repayment terms, as it acts as a financial track record for lenders looking to see how reliable you are. So it’s important to engage with your credit score, even at times where you’re not considering the need for credit.
2. Maintain your credit score
A credit score shows lenders that you’re trustworthy and will be able to comfortably pay repayments and bills. So it’s important to continue to build up and look after it. You can do this by paying your bills on time, in full each month, closing any unused accounts and limiting the amount of credit applications you make in a short space of time. Before making an application you can use eligibility checkers on websites like Experian to see your chances of getting approved, which could help prevent you making an application that gets denied and impacts your score. It’s also important to keep an eye on your account in case there is any fraudulent activity – if someone gains access to your personal details and tries to take our credit in your name it can hurt your score so it’s important to spot any issues early.
3. Don’t be discouraged by the word ‘budget’
Setting tangible financial goals is the key to success and with that you may find you need to budget. Although budgeting is often considered to be a dry and time-consuming topic, it’s as simple as knowing what’s coming in and out of your bank account. Budgeting is all about balance – it needs to be realistic and give you the means to enjoy yourself now whilst still setting you up for the future.
4. Consolidate your debt
If you find yourself in debt, you can reduce the amount you spend on interest by switching debts from existing cards onto a 0% balance transfer card. It’s a good option for those looking to make more affordable repayments. Whilst there’s often a fee associated with the switch, these cards allow you to pay off credit without accruing interest, meaning every penny goes towards reducing what you owe.
5. Reach out for help
If you find yourself struggling to repay credit or other bills then contact free debt advice services such as National Debtline, Citizens Advice or StepChange. These organisations can offer you confidential advice and help to put debt management strategies in place. The sooner you seek help the better.
Notes to editors:
All data from Experian marketplace, analysing the number of searches for credit products from April-October 2023. Analysis also compared search data between generations.
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