Gen Z is driving a radical shift in credit behaviour

In a world where financial habits are being rewritten in real time, Gen Z is leading a credit revolution – one that is now inspiring even their parents.

Digital-first financial tools, from almost-instant, unsecured short-term loans to fee-free, interest-free buy-now-pay-later (BNPL) options have been a firm favourite among Gen Z and millennial consumers– but a somewhat unexpected shift is the increasing adoption of these tools by those aged 45 and up.

Colin Campbell, Director of Marketing and Operations at digital financial services provider Finchoice says that older generations are now rewriting their financial narratives too. “Traditionally, credit was rigid, expensive, and sometimes even shameful – accessed through formal banks and used sparingly, usually only for major expenses. Where money was once taboo, conversations are becoming more open, and where credit was feared or misunderstood, it is now being embraced as a flexible tool,” he says.

Millennials have been a crucial bridge between the digital-first habits of Gen Z and the more conservative behaviour of older cohorts like Gen X, aged 45 to 60. “Our data shows that having a credit line open and available brings comfort, with millennials primarily leaning towards our short-term MobiMoney offering to provide for their immediate needs and smaller emergencies,” says Campbell.

Gen X, those aged 45 to 60, are now increasingly using digital credit tools too. Finchoice data shows that Gen X primarily use digital loans over a longer 12-to-24-months to meet personal goals, such as home renovations, while maintaining financial stability. But the data also shows that their use of short-term digital loans, used for immediate needs and smaller emergencies, is increasing proportionally with younger cohorts. “Over anything, this segment values transparency in being able to track the status of either their short or long-term loans digitally,” says Campbell.

Daniel Hawkins, Head of Marketing at PayJustNow says Gen X makes up 16% of PayJustNow’s total customer base – just 3% less than Gen Z – and their average basket size is 23% higher than the average across all age groups. They are using BNPL to spread payments for discretionary purchases over three months without incurring interest or fees. “We also see that affluent consumers in this segment are using BNPL instead of high-interest options like credit cards,” says Hawkins. “Globally, BNPL is projected to grow at double-digit rates over the next five years, with emerging markets like South Africa set to see some of the highest rates of adoption, driven by mobile penetration and shifting trust in financial tools,” he says.

So, what’s driving the shift? South Africa’s slow economic growth, rising cost of living, and frequent fiscal shocks have prompted consumers across age groups to rethink how they manage cash flow and prepare for the unexpected. “In an uncertain environment, consumers are turning to tools that give them back a sense of control and predictability,” says Campbell. “The data supports this shift in behaviour, with our customer logging into the app twice a month on average to manage and track their finances,” he says.

But not all credit is created equal – and in a climate where debt levels and unregulated lenders are on the rise, digital credit providers must do more than offer convenience. “This is where responsible platforms are setting themselves apart,” says Campbell. “Through smart use of data, thorough vetting processes, and built-in affordability checks, we can use technology to enable access while actively protecting consumers across the generational spectrum.”

Hawkins says that PayJustNow’s default rates remain as low as 2%, showing that innovation and accountability can, and should, go hand in hand.

“Gen Z has shown us that financial empowerment isn’t about age – it’s about mindset. With the right tools and the right outlook, every generation can embrace smarter, more resilient money habits. The future of credit is flexible, transparent and inclusive – and its already here,” he says.