Gen Z‘s Credit Scores Lag as Financial Pressures Mount
NEW YORK - A recent USAA survey reveals a concerning trend: nearly half of Gen Z consumers lack a full understanding of how credit scores function, and a full 20% have never even checked their score. This knowledge gap coincides with a period of important financial strain for the generation, as rising costs and economic uncertainty force many to rely on supplemental income and grapple with limited savings.
The lack of credit literacy among Gen Z is particularly noteworthy given the generation’s already precarious financial footing. While actively attempting to save, Gen Z is demonstrably vulnerable to unexpected expenses, unable to readily withstand financial shocks. PYMNTS Intelligence research shows Gen Zers hold an average of $5,948 in readily available cash, significantly less then the $8,594 held by millennials and $9,313 by Generation X.
This financial fragility is amplified by the current economic climate. Nearly 70% of Gen Z adults cite rising prices as their biggest day-to-day challenge, a higher percentage than both millennials (64%) and baby boomers (39%). Even those with savings are anxious; 40% express significant concern over the impact a $2,000 expense would have on their financial cushion, according to PYMNTS.
to combat thes pressures, gen Z is increasingly turning to side gigs. These part-time positions now account for 57% of the total income for Gen Z consumers – a substantial increase from the 43% average across all side hustlers. For those earning less than $50,000 annually, side gigs contribute a staggering 76% of their total income, effectively becoming a primary source of liquidity.
