According to a new report from credit scorer FICO, Gen Z is opening credit card accounts at higher rates than any other generation.

More than 25 percent of Gen Z adults between the ages of 18 and 29 with a FICO score had opened at least one credit card in the past year — the highest rate of any age group, according to Data

What is behind the plastic catch? Bills to be paid.

According to FICO Vice President Janelle Ditto, “When faced with a job loss or loss of income in the past 12 months, 48% of Gen Z and 43% of Millennials relied on credit cards to make ends meet, compared to 25% of Gen X and just 7% of Baby Boomers.”

All told, nearly 4 in 10 Gen Xers said they’re opening cards to have a financial cushion.

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These dovetails with the squeeze are facing Gen Zers. A separate study found that more than 6 in 10 older Gen Zers said they had stopped or reduced their retirement savings in the past several months.

Two-thirds of those Gen Zers added that they were unable to contribute as much to savings as they would have liked because of other demands.

All the while, their credit scores are sinking. By the end of 2025, Gen Z has the lowest average credit score of all age groups at 678, a three-point drop from last year and well below the national average of 714, placing them in the “decent” to “fair” range.

FICO Score It is a series of three digits ranging from 300 to 850 based on an individual’s expenses and debt. A high FICO credit score, typically 740 and above, is considered a low risk by lenders. A score of 740 to 799 is considered “very good,” while a score of 800 or above is classified as “exceptional.”

“The recovery in required student loan repayments has slightly lowered the average score,” said Ethan Dornhelm, head of scores analytics at FICO.

According to FICO research, nearly one-third, or 7.1 million, of student loan borrowers who had a payoff saw a new delinquency on their credit file. This pushed their credit scores down an average of 62 points from January 2025.

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If you’re making an entry-level salary, as well as struggling with student loans and credit card debt, it can feel crushing. Last year, for example, Gen Z consumers, most of whom are in their 20s, carried an average credit card balance of $3,493, according to Experience Data.

“When someone in that age range doesn’t have much of a cushion in monthly cash flow and either falls behind a little bit, or salary increases don’t keep up with the cost of living, it’s easy to see how that happens,” said J. Victor Conrad, a certified financial planner and founder of Pinnacle Financial Strategies in Wexford, Ohio.