The Subscription Generation: Young Poles Facing Debt Over Capital

Generation Z has experienced the steepest annual drop in credit scores of any age group since 2020, with the average FICO score falling three points to 676. This average is 39 points lower than the national average of 715, according to a FICO report cited on October 9, 2025.

The decline is described as a red flag by Erin Stillwell, head of payments at Globant, who noted that the trend affects both young consumers and the health of the broader credit market. Stillwell stated that today’s young adults are borrowing to reach baseline stability, not luxury, reflecting a generation attempting to build a financial identity in a system that rewards stability but gives volatility.

Drivers of Financial Fragility

The downturn in credit scores is attributed to a combination of stubborn inflation, high interest rates and the return of student loan payments. Gen Z consumers have had less time to build savings, invest in the stock market, or benefit from home appreciation compared to older generations, leaving them on shakier financial ground.

A behavioral trend known as doomspending—the impulse to spend as a way to cope with financial anxiety—has further contributed to the situation. Stillwell noted that Gen Z is the first cohort to simultaneously face high inflation, digital credit, and consumption pressure driven by social media.

While credit scores often ebb and flow during major shifts, such as the resumption of student loan repayments, Stillwell argued that the current fragility is structural rather than cyclical. This creates a potential long-term financial snowball that could trap the generation if spending and repayment habits do not change.

This financial instability persists even as Gen Z awaits its share of the $124 trillion Great Wealth Transfer from baby boomer relatives.

The Shift to Buy Now, Pay Later

As traditional credit becomes more difficult to manage, many Gen Zers are opting for buy now, pay later (BNPL) services over credit cards. On May 11, 2025, reporting indicated that 44 percent of Gen Zers used BNPL services in the previous year, which equates to approximately 30 million young people in the United States.

Nearly two out of five Gen Zers are choosing to pay for luxury items or food delivery, such as McDonald’s, in weekly or monthly installments rather than in full at checkout. These services are overtaking the long-standing popularity of credit cards for some users who view BNPL as a more flexible way to stretch purchases across multiple paychecks without accumulating high-interest debt.

Sabrina Rozza, a 25-year-old, used Afterpay to finance a $4,000 vacation to the Dominican Republic. Rozza stated the service was a great alternative to a credit card because she could make a down payment and then make payments over six months, noting that at the time, she was not making enough money to pay for the trip using a credit card.

However, experts warn that for a generation struggling with financial literacy, the habit of using payment plans can mask a dangerous cycle of overspending and impulsive splurging.

Systemic Debt and Financial Nihilism

Generation Z is accumulating more debt than any other generation, a trend compounded by higher interest rates and student loans. A report from the cash advance app Vola Finance found that 63 percent of Gen Z users already had debt.

On March 19, 2026, the World Economic Forum reported that Gen Z adults in the U.S., currently aged between 18 and 27, are facing a combination of stagnating wages, rising house prices, and growing personal debt.

These systemic pressures have led to an increase in financial nihilism among the cohort, as the gap between earnings and the cost of living continues to widen.