What’s happening?
Younger consumers don’t know what goes into traditional lending decisions. For example, 42% of Gen Zers don’t understand what factors into their credit scores, per a December 2023 Credit Sesame survey.
They also fear incurring debt more than older generations. Twenty-nine percent of Gen Zers and 32% of millennials believe their financial situation could lead to homelessness—three times more than older respondents, per a February 2024 Opinium Research survey commissioned by Acorns.
Instead of traditional loans, they’re taking what they think is the faster, easier route: BNPL. Consumers under the age of 35 comprise 48% of BNPL users, per our forecast. By contrast, they comprise just 35% of traditional credit card holders, per a 2023 report from LexisNexis Risk Solutions. Those who can’t or don’t want to go through the approval process can still make purchases with this alternative method.
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