TransUnion’s latest study on credit card growth indicates the youngest age group, those born after 1995, more than doubled their activity in opening new credit card accounts, while Baby Boomers (born 1946 to 1964) lost ground, and the Silent Generation (born before 1945) slipped by 50% between Q2-2018 and Q2-2021. Detailed below is a summary.
Credit Card Originations by Age Group
(Percentage of Total Originations)
| Generation | Q2 2021 | Q2 2020 | Q2 2019 | Q2 2018 | 2021 vs 2018 Pecentage Change |
| Gen Z (1995 and after) | 14.20% | 13.30% | 9.50% | 7.50% | 6.70% |
| Millennials (1980-1994) | 32.70% | 32.60% | 29.70% | 30.00% | 2.70% |
| Gen X (1965-1979) | 28.80% | 28.00% | 28.70% | 28.80% | 0.00% |
| Baby Boomer (1946-1964) | 21.30% | 22.50% | 26.90% | 27.80% | -6.50% |
| Silent (Prior to 1945) | 3.00% | 3.60% | 5.20% | 6.00% | -3.00% |
| Total Originations (millions) | 19.3 million | 8.6 million | 16.4 million | 15.8 million | |
While many issuers chase the elusive Millennial group, note the action in their younger age cohort.
On top of the record level of credit card originations is a return to consumer spending, particularly among the younger generations. In Q3 2021, Gen Z average balance per consumer increased 13.9% YoY – the only generation with two consecutive quarters of growth. Millennials also showed average balance growth per consumer with a 1.8% YoY increase.
As originations and balances rise for Gen Z, their serious delinquency rates continue to decline. In Q3 2021, the 90+ day borrower level delinquency rate was 1.52% for Gen Z consumers, a decline from the 2.31% (90+DPD) rate observed pre-pandemic in Q3 2019.
However, the most exciting comment in TransUnion’s analysis is that Buy Now, Pay Later borrowing did not hurt credit card borrowing; in fact:
A recent TransUnion study found that while Buy Now, Pay Later (BNPL), and Point-of-Sale (POS) have emerged as popular types of financing among Gen Z and Millennial consumers, these offerings have not had a major impact on the usage of other forms of credit. In fact, BNPL / POS applicants generally use other forms of credit more so than the rest of the credit active population.
When you combine TransUnion’s age analysis, indicating that the Gen Z feeder group is active, with solid collection results and aggressive card marketing, expect strong results in U.S. credit cards.
…Just keep your eye out on inflation and interest rates!
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group