After over a year of being stuck in lockdown, Gen Z has become more comfortable with the idea of credit card debt, Bankrate credit analyst Ana Staples said.
According to a study from creditcards.com, 56% of Gen Z are willing to go into debt post-pandemic. However, in 2020, half of Gen Z didn't have any debt outside of student loans, Staples said.
Bankrate public relations specialist, Chelsea Hudson, said Bankrate is a personal finance company that assists people through their financial issues. Hudson said the company aims to educate college students on personal finance topics and endorses Staples’ knowledge of financial well-being.
Staples said she worries about the financial stability of Gen Z now that life is slowly returning to normal.
"As we are coming out of this pandemic, young people seem to be prone to risky credit behaviors because there is this demand to go out and have fun," Staples said. "Young people can't wait to get out there, spend their money and get into credit card debt."
According to a Bankrate article by Staples, Gen Z has become prone to "travel-fever." This means young people are willing to spend more money on travel. About 40% of Gen Zers said they expect to spend more on travel in the second half of 2021, Staples said.
Staples advises against unnecessary overspending on things such as travel, as credit card debt can be detrimental to financial health if unmanaged.
"I think Gen Z should be very careful about debt, and I encourage them to use credit cards carefully and educate themselves with available resources," Staples said. "We found that most Gen Z get their personal finance advice from social media and 22% get no financial advice at all."
Staples said it is important to set spending limits when budgeting. It is vital for young people to be mindful of budgets to create healthy financial habits, she said.
Staples said she recommends college students seek advice wherever they can but to ensure information is gathered from trustworthy sources. Staples said the earlier these resources are used, the better Gen Z's financial situation will be.
Although Gen-Z has proven to be more comfortable with debt since the pandemic, some IU students, such as sophomore Kendall Henderson, seem to be as wary as before.
“I think that credit cards should primarily be used if you have the means to pay them off at the end of each month, especially if you’re a student,” Henderson said. “If not, you’re just digging yourself a hole.”
Claire Dickey, product editor at Bankrate, said college students should also be educated on financial literacy to protect themselves from dangerous spending habits. It is best to set aside time every month to review your finances in order to protect financial stability, she said.
"Review your bank account and credit card statements each month to ensure your spending is in line with whatever budget you've set for yourself, along with any other accounts you save, spend and invest in," Dickey said in an article.