A new nationwide survey suggests that younger consumers are rethinking how they pay for everyday purchases, and the shift may be creating new financial pressure points for banks, lenders, and collectors.
Debit cards have become the dominant payment method, especially among Gen Z and millennials, according to a recent U.S. News & World Report survey. While 42% of baby boomers still primarily rely on credit cards, only 27% of younger respondents say the same. More than one in five Gen Z respondents report never using a credit card at all.
The appeal is straightforward: younger consumers say debit cards help them avoid debt and better track spending. Millennials, in particular, overwhelmingly view debit as the most financially sound option. But the survey shows this preference comes with tradeoffs … and growing financial strain.
Nearly 60% of all respondents say they overdrew their checking account in the past year, with two-thirds of Gen Z and millennials reporting at least one overdraft. At the same time, 38% of respondents missed a credit card payment, and 14% failed to make a buy now, pay later (BNPL) payment. Boomers, who use credit cards most often, were the generation most likely to miss a credit card payment.
The findings also reveal widespread confusion around credit building. Roughly 43% of respondents mistakenly believe debit card usage helps establish credit, despite the fact that most debit transactions are not reported to credit bureaus. This misconception could contribute to thinner credit files among younger consumers — even as they remain highly engaged in the financial system through debit, BNPL, and cash.
BNPL usage continues to skew younger, with about half of Gen Z and millennials using it at least occasionally. Cash, surprisingly, also remains popular among younger respondents, suggesting a desire for spending control rather than access to revolving credit.
For creditors, collectors, and healthcare revenue cycle teams, the message is clear: consumers are trying to manage risk, not ignore obligations. Education gaps, overdraft exposure, and payment fatigue are shaping behavior more than access alone.
