One in three young people view credit cards as ‘potential debt traps’

New research by Uswitch has found that the UK’s attitudes to credit cards are changing, as nearly one in three (31%) young people perceive them as ‘potential debt traps.’

Only one in five (20%) of Gen Z say they have ‘no concerns regarding credit card usage’, with the remaining 80% stating their main concerns as overspending, high interest rates, annual fees, impact on credit scores and fraud.

81% of 18-24 year olds say they don’t always pay their balance off in full every month, stating ‘managing cash flow’ as the primary reason for carrying across a balance on their credit cards[10].

A large majority of young people have shunned credit cards for good (43%), however, some are still taking them out in order to receive benefits such as sign-up bonuses.  42% say they have signed up for a credit card purely to take advantage of a promotional offer or sign-up bonus, with 13% saying they have done this multiple times.

Furthermore, over half (52%) of Gen Z who own a credit card say they have participated in a rewards program, such as redeeming points or miles for rewards or cashback.

The survey showed that respondents aged 55+ are three times more likely than Gen Z to say they always pay their credit card off in full each month (61% vs 19%) with difficulty managing cash flow cited as the key reason.

Consumers aged 18-24 are least likely to use online banking to manage their credit card, instead opting for an ap whilst four in ten (42%) of Gen Z have applied for a credit card specifically for a promotional offer or sign-up bonus.

Christian Blunden, Uswitch Credit Card Expert said “To shift Gen Z’s perception of credit cards, we need to blend financial literacy with the lifestyle benefits they crave, transforming plastic into a tool for empowerment rather than debt. By emphasising rewards, transparency, and responsible spending, we can make credit cards not just a financial instrument, but a smart choice for their future.”

What other features would make credit cards more appealing to Gen Z?