Advice On Winning Over Gen Z In ’25

NEW YORK—As 2025 approaches the close of Q1, how can credit unions win over Gen Z? By tailoring credit rewards for a digital-first generation, a new report recommends.

Gen Z is reshaping the workforce and redefining financial behaviors. As of 2024, this generation is poised to surpass Baby Boomers in workforce size and will make up 30% of the workforce by 2030.

This rapid growth presents a major opportunity for financial institutions to tap into a younger, digitally native audience with distinct spending habits and financial needs, emphasized a GlobalData report authored by Zachary Johnson, specialist, campaign execution & strategy, financial services at VDX.tv.

“Unlike previous generations, Gen Z’s economic journey has been shaped by inflation and delayed career starts due to the pandemic and skyrocketing living costs. These factors have made them highly dependent on credit, with Gen Zers being 23% more likely to own a credit card than Millennials at the same age, and carrying an average of $1,126 more in balances,” Johnson explained, noting financial institutions must recognize this generation’s unique relationship with credit—and their dissatisfaction with traditional rewards programs.

Bridging The Rewards Gap

Gen Z is drawn to credit card rewards but finds many current offerings irrelevant or unattainable. While 94% of Gen Z consumers are eager to earn reward points, 41% report dissatisfaction with existing programs, and 43% are highly likely to switch to cards that better meet their preferences. Traditional cash-back rewards, while popular across other generations, hold less appeal for Gen Z, as these programs often require high spending to deliver meaningful benefits–something a younger generation with limited income simply cannot achieve, Johnson noted.

Instead, Gen Z gravitates toward rewards that align with their lifestyles. Subscription or membership rewards resonate with 24% of Gen Z consumers, nearly triple the interest shown by Boomers. Digital-focused offerings—like free shipping, streaming service discounts or partnerships with tech-forward brands—could be game-changers for FIs looking to engage this audience, Johnsons said.

Digital-First Marketing: Where Gen Z Lives

To reach Gen Z effectively, financial institutions must embrace their digital behaviors, Johnson said.

“Nearly half of Gen Z consumers watch video streaming services daily, making them 8% more likely than the general population to consume digital video. Their media consumption splits evenly between connected TV (CTV) and traditional digital platforms like YouTube, social media and mobile video,” he said. “This means a balanced media plan leveraging both CTV and non-TV digital video is essential. Gen Z’s propensity to skip ads demands creative strategies, such as engaging, non-skippable formats or gamified advertising experiences.”

Rethinking Credit Card Strategies

Johnson added that Gen Z’s spending patterns reveal another opportunity—80% of this cohort is actively working to build credit, despite the challenges posed by inflation and limited income. Financial institutions could attract these customers by offering programs that reward financial responsibility, such as increased rewards for on-time payments or incentives tied to credit score improvements.

“This generation also uses credit cards more for everyday purchases than for significant expenses like personal or student loans. A card designed around frequent, smaller transactions, coupled with flexible rewards tailored to their spending, could prove highly appealing,” Johnson said.

The Bottom Line

Gen Z is a growing, influential audience that requires a fresh approach from financial institutions, Johnson concluded.

“Traditional rewards programs and media strategies won’t resonate with a generation defined by digital habits, financial challenges, and a drive to build credit early,” he said. “Embrace tailored rewards, innovative targeting and digital-first marketing strategies, to capture the loyalty of this untapped market and establish lasting relationships with a generation shaping the future of finance.”